NEW YORK (Reuters) - Wall Street dipped on Monday afternoon, reversing gains from earlier in the session, as healthcare stocks slid and investors worried about rising costs for companies as oil prices rose.
The healthcare sector .SPXHC, which dropped 1.2 percent, weighed most heavily on the S&P 500.
Shares of Allergan plc (AGN.N) fell 4.8 percent after the company’s chief executive said he was opposed to fundamental changes to the drug company’s business strategy.
Celgene Corp shares (CELG.O) fell 3.8 percent. Morgan Stanley said it expects a delay of up to three years for Celgene’s key multiple sclerosis drug, ozanimod.
Oil prices rallied after Israeli Prime Minister Benjamin Netanyahu said Iran had lied about not pursuing nuclear weapons and had expanded its nuclear weapons knowledge after signing a 2015 deal with global powers. U.S. President Donald Trump has until May 12 to decide whether to restore sanctions on Iran.
Oil has risen this month to the highest since late 2014, driven by concerns over potential disruptions to Iranian crude flows. [O/R]
Even as companies’ quarterly results have come in strong, their earnings calls have raised concerns that rising commodity prices may pinch profit margins in the future.
Some investors suggested that on balance, the strong earnings season has not been enough for U.S. stocks to break out of their recent trading range.
“The earnings are priced in,” said Robert Phipps, a director at Per Stirling Capital Management in Austin, Texas. “There’s not a whole lot of reason to buy. We’re stuck in the mud right now.”
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