Wall Street retreated on Wednesday, pulled lower by weakness in the materials and healthcare sectors as investors continued to weigh the possibility of an interest rate hike in the coming months.
Healthcare shares, off 1.6 per cent, saw their biggest drop since June 24. They were dragged lower by a 5.4-per cent drop in Mylan to $43.15 as political pressure mounted on the company in the wake of price increases for its EpiPen allergy treatment.
Materials were down 1.2 per cent as names such as
The market is awaiting Federal Reserve Chair Janet Yellen’s speech in Jackson Hole, Wyoming, on Friday for insight on the direction of monetary policy.
Recent hawkish comments from some Fed officials, including Vice-Chairman Stanley Fischer, have raised expectations that Yellen might signal a hike in September.
“The market over the past several weeks has been in a holding pattern, really not doing much of anything and the reason for that is everyone is waiting to hear what Yellen is going to say,” said Peter Cardillo, chief market economist at First Standard Financial in New York.
“Of course the markets might get surprised. The markets are looking for clarity and we might not get clarity.”
The benchmark S&P 500 has not seen a move of more than 1 per cent in either direction on a closing basis since July 8.
Expectations for a rate hike in September are at 18 per cent, up from 12 per cent at the end of last week, according to CME Group’s FedWatch. The odds of a hike in December are slightly more than 50 per cent.
While Wall Street is trading near record levels, volumes have been below average in the past few sessions as the US earnings season winds down and traders avoid major bets until a clearer picture on monetary policy emerges.
The Dow Jones industrial average fell 65.82 points, or 0.35 per cent, to 18,481.48, the S&P 500 lost 11.46 points, or 0.52 per cent, to 2,175.44 and the Nasdaq Composite dropped 42.38 points, or 0.81 per cent, to 5,217.70.
Express Inc plunged 25.5 per cent after the apparel maker slashed its full-year earnings outlook.
Declining issues outnumbered advancing ones on the NYSE by a 2.39-to-1 ratio; on Nasdaq, a 1.96-to-1 ratio favoured decliners.
The S&P 500 posted 16 new 52-week highs and no new lows; the Nasdaq Composite recorded 100 new highs and 19 new lows.
About 6.09 billion shares changed hands in US exchanges, compared with the 6.26 billion daily average over the last 20 sessions.