US stocks reversed their gains by mid-morning on Thursday as energy shares fell in tandem with oil prices and healthcare stocks came under pressure.
The S&P 500 fell 0.3 per cent to 2,378.94 — with the energy sector down 0.8 per cent. Meanwhile, the Dow Jones Industrial Average was trading 0.2 per cent lower at 20,907.51, while the Nasdaq Composite dropped 0.1 per cent to 5,892.29.
Oil, which had been in the green earlier in the day, erased its gains as investors once again fretted about the effect that higher US production would have on Opec’s efforts to rebalance the oil market.
West Texas Intermediate, the US crude marker, fell 0.4 per cent to $48.69 a barrel, while its global counterpart, Brent, declined 0.1 per cent to $51.74 a barrel.
The S&P 500 was also weighed down by the retreat in healthcare stock. The sector was the day’s biggest loser, notching a 1.1 per cent decline. Within this, Biogen shares fell more than 5 per cent $276.75 after analysts at Morgan Stanley and Leerink downgraded the stock. Illumina and Amgen shares also figured among the top 10 worst performers on the S&P 500.
The sell-off comes as an outline of President Donald Trump’s budget plan included a proposal to cut Health and Human Services (HHS) spending by 18 per cent or about $15bn, including a $5.8bn cut from the National Institute of Health (NIH). However it did spare some of the more controversial aspects of the budget, like Medicare.
Elsewhere, US Treasuries declined, with the yield on the US 10-year note, which moves inversely to price, rising 2.9 basis points to 2.52 per cent. Gold prices climbed 0.7 per cent to $1,228.06 a troy ounce, rising for a second straight day as the Federal Reserve on Wednesday signalled just two additional rate cuts this year.