Close Update: Wall Street's Winning Streak Snapped by Drug Sector, Tax Reform

Close Update: Wall Street's Winning Streak Snapped by Drug Sector, Tax Reform

The Dow Jones Industrial Average closed lower Monday, ending a three-day winning streak after investors cashed in on some of last week’s gains ahead of a heavy economic and earnings calendar, as well as by reports that lawmakers might consider altering the GOP tax reform plan, and after a member of President Donald Trump’s campaign staff was indicted for money laundering.

The healthcare sector took the brunt of Monday’s selling pressure with Dow component Merck ( MRK ) adding to Friday’s oversized loss by spiralling to a 17-month low. Losses spilled into the rest of the pharmaceutical sector with Pfizer ( PFE ) and AbbVie ( ABBV ) down by more than 1%.

Shares were already trending lower overnight with news of one of Trump’s campaign team facing charges by the FBI. The knee-jerk reaction to the Bloomberg report about alterations to the president’s tax reform plan accelerated selling pressure and cost the Dow Jones Industrial Average all of Friday’s modest gains.

The risk-off trade drove Treasury yields lower across the curve, gold up by $5 an ounce and the dollar lower against the yen.

Monday’s economic data had little impact on the financial markets even as consumption spending recorded its largest monthly increase since August 2009. Incomes rose an as-expected 0.4% last month.

Tuesday economic agenda kicks off with the Q3 employment cost index, Case-Shiller home price index, the Chicago purchasing manager’s index and consumer confidence. Also, the Federal Open Market Committee kicks off its two-day policy meeting.

On the earnings front, Pfizer ( PFE ) and Under Armour ( UAA ) are some of the headliners before the open.

Here’s where the markets stood at the close:

US MARKETS

Dow Jones Industrial Index was down 85.45 points (-0.36%)

S&P 500 was down 8.24 points (-0.32%)

Nasdaq Composite Index was down 2.30 points (-0.03%)

GLOBAL SENTIMENT

FTSE 100 was down 0.23%

Nikkei 225 was up 0.01%

Hang Seng Index was down 0.36%

Shanghai China Composite Index was down 0.77%

UPSIDE MOVERS

(+) SPCB (+36.26%) Q3 earnings and sales beat expectations

(+) CPLA (+30.46%) Merging with Strayer Education ( STRA )

(+) MICT (+30.41%) Subsidiary receives $3.1 million order for its SmartHub-TREQr5 product

(+) CAA (+21.34%) Merging with Lennar Homes (LEN)

DOWNSIDE MOVERS

(-) ICON (-62.32%) Danskin Now dropped by Walmart (WMT), renegotiating terms of loan facility

(-) ODP (-18.28%) Downgraded at JP Morgan to underweight from neutral

(-) PSTI (-14.72%) Plans to conduct public offering of up to 9 million shares

(-) S (-9.30%) Softbank reportedly ending negotiations to merge with T-Mobile (TMUS)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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