U.S. stocks closed lower on Monday, failing to hold Friday's records, as investors eyed earnings and looked ahead to the beginning of the two-day Federal Reserve meeting on Tuesday. ( Tweet This )
"I don't think it's a new pattern because we were used to the S&P getting near highs then pulling back," said Art Hogan, chief market strategist at Wunderlich Securities. "Health care has outperformed everybody else. ...Rather than a market meltdown, it's profit taking on a high-flying momentum group."
The Nasdaq reversed to trade mildly lower around noon as biotech stocks lagged. The iShares Nasdaq Biotechnology ETF (IBB) fell more than 4 percent to near its 50-day moving average. Health care was the greatest decliner in the S&P 500, with the S&P Biotech ETF falling more than 5.5 percent.
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"It's all about earnings today," said Doug Cote, chief market strategist at Voya Investment Management. "Biotechs are purely a volatile sector of the market."
"The fact that they broke off negotiations—obviously that's impacting the market here," said Peter Cardillo, chief market economist at Rockwell Global Capital.
The Dow Jones industrial average attempted to hold gains but traded mostly lower as Pfizer and UnitedHealth declined about 2 percent to be among the greatest laggards.
"The theme throughout this year is that equity markets had difficulty sustaining new highs," said Anthony Valeri, investment strategist at LPL Financial. He noted pressure from lingering concerns about half of companies missing on revenue, and the possibility that tepid first quarter growth could continue into the rest of the year.