US markets waver ahead of Fed meeting
Investors proved cautious ahead of the Federal Reserve's two-day policy meeting that ends on Wednesday.
U.S. stocks ended down on Monday, led by losses in biotech shares after disappointing news from several companies including Amgen.
The Nasdaq Biotech Index sank 4.1 percent, its biggest daily percentage loss since March 25, while the S&P Healthcare index, down 1.8 percent, was the biggest drag on the benchmark S&P 500 index.
Amgen shares led the S&P 500 and Nasdaq's decline, dropping 3.3 percent to $162.38 after U.S. regulators said Amgen's skin cancer immunotherapy cannot be considered for an accelerated review at this time.
Celladon Corp shares fell 80.7 percent to $2.64 and hit a record low of $2.59. It said it expected layoffs and cost cuts after the company's lead experimental gene therapy to treat heart failure failed a key trial.
Healthcare companies have been the top performers so far in 2015, helping push major stock indexes to records. Biotechs in particular have driven up the Nasdaq, which last week reached its first all-time closing high in 15 years.
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Reports criticizing high drug prices weighed on the sector on Monday as well as the news from Celladon and Amgen, said Paul Yook portfolio manager of biotech exchange traded funds and at LifeSci Partners in New York.
"Drug pricing has been a real concern for investors,'' he said.
The Nasdaq biotech sector briefly fell into bear market territory a year ago following a selloff in Gilead shares and concerns about valuations. But analysts said for now they don't view Monday's selloff as the start of a bigger drop.
The Nasdaq biotech index is up more than 50 percent since April 2014.
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``This run in the biotechs is going to come to end at some point but I'm not panicking yet,'' said Bill Gunderson, president of Gunderson Capital in San Diego. ``You might just have a big institution reallocating a little bit of money here.''
The Dow Jones industrial average fell 42.17 points, or 0.23 percent, to 18,037.97, the S&P 500 lost 8.77 points, or 0.41 percent, to 2,108.92 and the Nasdaq Composite dropped 31.84 points, or 0.63 percent, to 5,060.25.
Also in healthcare, Mylan fell 5.7 percent to $71.72 after it rejected Teva Pharmaceutical's unsolicited $40 billion takeover offer, saying it ``grossly undervalues'' the company. Teva lost 4.3 percent to $61.63.
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The Health Care Select Sector SPDR exchange-traded fund was down 1.8 percent. After the bell, Apple shares gained 1.1 percent as the iPhone maker reported a 27 percent jump in quarterly revenue. Its shares ended the regular session up 1.8 percent at $132.65.
NYSE declining issues outnumbered advancers 1,923 to 1,130, while on the Nasdaq, 1,956 issues fell and 805 advanced. The S&P 500 posted 14 new 52-week highs and 1 new low; the Nasdaq
Composite recorded 101 new highs and 42 new lows.
About 6.8 billion shares changed hands on U.S. exchanges versus the 6.2 billion daily average for the month to date, according to data from BATS Global Markets.