Wall Street stocks down; healthcare stocks eclipse gains in Cisco

Shares of major health insurers UnitedHealth ( $UnitedHealth (UNH.US)$ ) and Cigna ( $Cigna Group (CI.US)$ ), which also have PBM units, dropped by 1.9 per cent and 6.4 per cent respectively, pushing the broader S&P 500 healthcare index (.SPXHC) 0.8 per cent lower. The S&P 500 (.SPX) lost 33.97 points, or 0.77 per cent, to 4,370.36 and the Nasdaq Composite (.IXIC) dropped 143.75 points, or 1.07 per cent, to 13,330.88. The S&P 500 is down 2.7 per cent over the past three sessions, its deepest three-session drop since mid-March. The Nasdaq's 3.4 per cent drop over three days marks its deepest three-day drop since February.

The Dow Jones Industrial Average (.DJI) fell 290.91 points, or 0.84 per cent, to 34,474.83. Higher oil prices lifted shares of Exxon Mobil ( $Exxon Mobil (XOM.US)$ ) and Chevron ( $Chevron (CVX.US)$ ) by 1.9 per cent to 1.7 per cent respectively, as commodities were helped by hopes that China's central bank was seeking to bolster the property market and wider economy. Pressuring equities further, the yield on 10-year U.S. Treasury notes hit its highest level since October as a raft of strong economic data this week stokes concerns the Fed could keep interest rates at the current level for longer.

The stock market's weakness in recent days is due to robust U.S. economic growth suggesting the Fed is likely going to embrace "high rates for longer," said Barry Bannister, chief equity strategist at Stifel. A majority of traders expect the Federal Reserve to keep rates unchanged in September, though bets of a pause have slipped to 86.5 per cent from about 89 per cent a week earlier, according to CME Group's Fedwatch tool.
Keeping a lid on losses, Cisco Systems  gained 3.3 per cent after the networking equipment maker's fourth-quarter results beat estimates, and its CEO talked up artificial intelligence opportunities. Shares of Pfizer (PFE.N) rose 2.9 per cent as the company said its updated COVID-19 shot, which is being tested against emerging variants, showed neutralizing activity against the "Eris" subvariant in a study conducted on mice.
Vaccine makers Moderna ( $Moderna (MRNA.US)$ ) and Novavax ( $Novavax (NVAX.US)$ ) also rose as U.S. data showed COVID-19-related hospitalizations up more than 40 per cent from recent lows hit in June. Retail heavyweight Walmart ( $Walmart (WMT.US)$ ) raised its full-year forecasts after beating second-quarter sales estimates, but its shares fell 2.2 per cent. Declining stocks outnumbered rising ones within the S&P 500 (.AD.SPX) by a 2.7-to-one ratio.
The S&P 500 posted two new highs and 17 new lows; the Nasdaq recorded 25 new highs and 252 new lows. Volume on U.S. exchanges was relatively heavy, with 11.2 billion shares traded, compared to an average of 11.0 billion shares over the previous 20 sessions.