Dow, S&P hit highs but Trump comments slam drug stocks

By Yashaswini Swamynathan

(Reuters) - The S&P 500 and the Dow hit record intraday highs on Wednesday, helped by gains in bank stocks, but President-elect Donald Trump's comments on drug prices slammed the healthcare sector, pulling down the Nasdaq.

Trump, in an interview with the Time magazine, said he would bring down drug prices.

The S&P 500 healthcare index swiftly lost nearly 2 percent, while the Nasdaq Biotechnology index dropped 3.8 percent - set for its worst day in nearly two months.

Trump's effect was also seen on Tuesday, with Boeing's stock falling after his tweet that an order for a revamped Air Force One plane should be canceled as it was too expensive.

"I think it is a new fact of life going forward, that fundamentals can be swept aside any day by comments from the (President-elect)," said David Donabedian, chief investment officer of Atlantic Trust Private Wealth Management.

Pfizer's shares fell 2.7 percent to $30.70 after Britain's competition watchdog fined the drugmaker $107 million for its role in ramping up the cost of an epilepsy drug by as much as 2,600 percent.

Nine of the top 10 stocks weighing on the S&P 500 were drug-related, with Johnson & Johnson and Pfizer having the biggest impact.

The healthcare sector caught a bid in the post-election rally following the defeat of Democrat nominee Hillary Clinton, who had been vocal about drug pricing. However, Trump's comments on Tuesday add fresh uncertainty to the industry.

At 10:57 a.m. ET (1604 GMT), the Dow Jones industrial average was up 15.24 points, or 0.08 percent, at 19,267.02. It hit a record of 19,276.25.

The S&P 500 was up 2.02 points, or 0.09 percent, at 2,214.25, slightly below its all-time high of 2,214.74.

The Nasdaq Composite was down 2.26 points, or 0.04 percent, at 5,330.74.

Nine of the 11 major S&P 500 sectors were higher, led by a 1.2 percent gain in real estate.

Financial stocks rose 0.4 percent, their third straight day of gains, giving the broader index its biggest boost.

While an interest rate hike at the Federal Reserve's meeting next week is a foregone conclusion, investors are on the lookout for how the central bank views Trump's pro-growth policies and whether that could lead to more aggressive rate hikes next year.

Celgene lost 3.4 percent to $113.55 following its announcement that it would not further test a combination of its breast cancer drug Abraxane with chemotherapy.

Western Digital rose 4.8 percent to $67 after the data storage maker raised its second-quarter profit and revenue forecasts. The stock was the top percentage gainer on the S&P.

Advancing issues outnumbered decliners on the NYSE by 1,974 to 842. On the Nasdaq, 1,461 issues rose and 1,173 fell.

The S&P 500 index showed 50 new 52-week highs and six new lows, while the Nasdaq recorded 172 new highs and 18 new lows.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Sriraj Kalluvila and Saumyadeb Chakrabarty)