© Reuters. FILE PHOTO: Wall Street sign pictured outside the New York Stock Exchange in New York, October 28, 2013. REUTERS/Carlo Allegri/Photo Files/Photo Files
By Saeed Azhar and Amruta Khandekar
NEW YORK (Reuters) – Wall Street’s main indexes closed lower after choppy trading on Thursday as declines in healthcare shares outpaced gains in Cisco and energy shares, while upbeat economic data kept alive fears interest rates could stay higher for longer.
Heavy on , CVS Health (NYSE:) tumbled 8% on news that Blue Shield of California plans to cut its reliance on the company as a pharmaceutical benefits manager (PBM) and work with others including Amazon.com (NASDAQ:).
Major health insurers UnitedHealth (NYSE:) and Cigna (NYSE:), which also owns a PBM unit, fell 1.9% and 6.4%, respectively, pushing the broader S&P 500 healthcare index 0.8% more. low.
The S&P 500 lost 33.97 points, or 0.77%, to 4,370.36 and was down 143.75 points, or 1.07%, to 13,330.88.
The S&P 500 is down 2.7% over the last three sessions, its deepest three-session drop since mid-March. The Nasdaq’s 3.4% drop for three days marked its deepest three-day drop since February.
It fell 290.91 points or 0.84% to 34,474.83.
Higher oil prices lifted stocks Exxon Mobil (NYSE:) and Chevron (NYSE:) by 1.9% to 1.7% respectively, as commodities helped by hopes that China’s central bank is seeking to boost the property market and broader economy.
Pressured on equities further, yields hit their highest since October as a string of strong economic data this week stoked fears the Fed could keep interest rates at current levels for longer.
“Stocks may be choppy in the near term while we wait for earnings to pick up or yields to fall,” said Jeffrey Buchbinder, chief equity strategist at LPL Financial (NASDAQ:).
A report from the Labor Department showed a drop in jobless claims last week, signaling the labor market remains tight.
Minutes from the Fed’s July meeting released on Wednesday showed most policymakers were prioritizing the battle against inflation, adding to uncertainty about the central bank’s rate path.
The stock market’s weakness in recent days has been attributed to strong US economic growth which suggests the Fed is likely to maintain “high rates for a longer time,” said Barry Bannister, chief equity strategist at Stifel.
The majority of traders expect the Federal Reserve to keep interest rates unchanged in September, although the pause bet has fallen to 86.5% from around 89% a week earlier, according to the CME Group’s (NASDAQ:) Fedwatch tool.
Guarding losses, Cisco Systems (NASDAQ:) rose 3.3% after the network equipment maker’s fourth-quarter results beat forecasts, and its CEO broached artificial intelligence opportunities.
Stock from Pfizer (NYSE:) rose 2.9% as the company said its updated COVID-19 shot, which is being tested against the emerging variant, showed neutralizing activity against the “Eris” subvariant in studies conducted on mice.
Vaccine maker Modern (NASDAQ:) and Novavax (NASDAQ:) also rose as US data showed COVID-19 related hospitalizations up more than 40% from recent lows hit in June.
Retail heavyweight Walmart (NYSE:) raised its full-year forecast after beating its second-quarter sales forecast, but its stock fell 2.2%.
The stock’s declines outnumbered the S&P 500’s increases by a ratio of 2.7 to one.
The S&P 500 posted two new highs and 17 new lows; The Nasdaq recorded 25 new highs and 252 new lows.
Volume on US exchanges was relatively heavy, with 11.2 billion shares traded, compared with the 11.0 billion average over the previous 20 sessions.
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