U.S. stocks closed mostly lower Thursday as modest gains in financial stocks failed to offset declines in health care and utilities stocks.
Utilities closed nearly 1.1 percent lower as the worst performer in the S&P 500, followed by the health care sector, which lost 0.9 percent. Within health care, shares of Biogen led declines, dropping nearly 4.7 percent after Morgan Stanley downgraded the stock to equal weight.
Analysts also attributed the overall health care sector losses to President Donald Trump's budget blueprint, released Thursday, that proposed cutting the National Institutes of Health's (NIH) spending by $5.8 billion.
"The proposed cut in the NIH budget is pretty significant and I don't know if it will happen," said Paul Yook, portfolio manager at BioShares Funds. "The NIH is a $32 billion budget. It was expected to increase 3 percent. To have it slashed by 18 percent, $6 billion, is a tremendous change."
Earlier, the health care sector hit a fresh high going back to August 2015.
The financial sector closed 0.3 percent higher as the top performer in the S&P. Goldman Sachs and IBM had the greatest positive impact in the Dow Jones industrial average.
The Nasdaq composite eked out a gain in the close, ending within a quarter percent of its all-time intraday high. The Dow and S&P closed within 1.5 percent of their record highs.
"The market saw a bullish reaction to the Fed's announcement yesterday, allowing the S&P futures to clear intraday resistance. The ratio of up- to down-volume was better than 5-to-1, setting the stage for upside follow-through today," Katie Stockton, chief technical strategist at BTIG, said in a note. However, she still expects stocks to remain in "pullback-mode until short-term momentum improves."
U.S. crude oil futures reversed earlier gains settle down 11 cents at $48.75 a barrel. WTI snapped a seven-day losing streak Wednesday after weekly inventory data showed a drawdown in stockpiles.
In corporate news, Toronto-based luxury apparel maker Canada Goose went public on the New York Stock Exchange Thursday. Shares opened at US$18 and closed at $16.08, about 25 percent above their IPO price. Canada Goose will also trade on the Toronto Stock Exchange.
Shares of Snap, another recent IPO and the parent of Snapchat, dropped 4.2 percent to close below $20 a share.
On Wednesday, the Federal Reserve raised interest rates as expected and continued to signal two additional hikes this year. Policymakers said inflation should now "stabilize" around 2 percent and they would continue to monitor developments relative to the Fed's "symmetric" inflation goal. Markets had generally expected indication of more aggressive tightening.
U.S. stocks jumped after the news to close higher Wednesday, with the Nasdaq 100 at a record.
Stock index futures held higher after a slew of Thursday morning economic reports. The latest Job Openings and Labor Turnover Survey showed job openings were little changed at 5.6 million on the last business day of January 2017.
Weekly initial jobless claims fell to 241,000. Housing starts rose in February to a seasonally adjusted annual rate of 1.288 million, more than expected. The Philly Fed Index also topped forecasts at 32.8 for March.
Gold futures leaped to their highest since March 6. Futures for April delivery settled up $26.40 at $1,227.10 an ounce.
While the Fed statement was "arguably hawkish overall, it was not as hawkish as many people in the market place feared, which lifted commodities and [sent] the dollar lower," said Jim Wyckoff, senior analyst at Kitco Metals.
Treasury yields edged higher, steadying after a drop Wednesday afternoon. The was last near 1.34 percent and the 10-year yield traded around 2.53 percent.
The U.S. dollar index traded about half a percent lower, with the euro around $1.077 and the yen near 113.2.
The euro topped $1.07 late Wednesday after the Dutch election gave Prime Minister Mark Rutte a victory over populist rival Geert Wilders.
"I think the economic data continues to support the growth thesis," said Jack Ablin, chief investment officer at BMO Private Bank. "Political risk seems to have pulled back a bit on the Dutch election. Most of the action we're seeing is overseas."
Major U.S. Indexes
Overseas, the STOXX Europe 600 closed 0.7 percent higher. The Nikkei 225 ended 0.07 percent higher.
The Shanghai composite rose 0.8 percent and the Hang Seng jumped nearly 2.1 percent after China's central bank raised short-term interest rates.
The Dow Jones industrial average closed 15.55 points lower, or 0.07 percent, at 20,934.55. Chevron and 3M contributed the most to losses, while Goldman Sachs and IBM had the greatest positive impact.
The S&P 500 lost 3.88 points, or 0.16 percent, at 2,381.38. Utilities led seven sectors lower, while financials were the top advancer.
The Nasdaq composite closed up 0.71 points, or 0.01 percent, at 5,900.76.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded lower near 11.2.
About four stocks advanced for every three decliners on the New York Stock Exchange, with an exchange volume of 804 million and a composite volume of 3.3 billion in the close.
On tap this week:
Friday
Earnings: Tiffany
9:15 a.m. Industrial production
9:15 a.m. Capacity utilization
10:00 a.m. Consumer sentiment
*Calendar subject to change.