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By Sinead Carew
(Reuters) - U.S. stocks slipped on Thursday as healthcare and utilities stocks fell while financials rose with bond yields as traders reversed their initial reaction to the U.S. Federal Reserve's policy statement, which was more dovish than expected.
The financial index <.SPSY> was the S&P's strongest sector, rebounding from Wednesday's decline while utilities <.SPLRCU> - often used as a proxy for bonds - were its weakest link as benchmark 10-year Treasury note yields rose.
Investors were likely taking profits in healthcare stocks, which have outperformed the broader market so far this year but face policy uncertainty, according to Jim Paulsen, chief investment strategist at Wells Capital Management in Minneapolis.
Although President Donald Trump made headlines with a budget proposal signalling higher regulatory costs for drug companies, investors are not convinced the administration will be able to win passage of the healthcare changes it is seeking, Paulsen said.
"There's a lot of roadblocks to getting anything substantial passed. In the meantime, you've had a heck of a run in healthcare stocks. It's just a good time to take a little profits," he said.
The S&P 500 healthcare index <.SPXHC> dropped more than 1 percent while utilities fell 1.3 percent. A 0.1 percent gain in technology <.SPLRCT> and a 0.3 percent gain in financials helped stem overall losses.
At 3:13 p.m., the Dow Jones Industrial Average <.DJI> was down 34.93 points, or 0.17 percent, to 20,915.17, the S&P 500 <.SPX> had lost 5.85 points, or 0.25 percent, to 2,379.41, and the Nasdaq Composite <.IXIC> had dropped 5.46 points, or 0.09 percent, to 5,894.59.
Shares of Tesla
Advancing issues outnumbered declining ones on the NYSE by a 1.20-to-1 ratio; on Nasdaq, a 1.34-to-1 ratio favoured advancers.
The S&P 500 posted 52 new 52-week highs and one new low; the Nasdaq Composite recorded 139 new highs and 49 new lows.
(Additional reporting by Yashaswini Swamynathan in Bengaluru; Editing by Leslie Adler)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)