Wall St trims gains, dragged down by biotechs

By Tanya Agrawal

(Reuters) - U.S. stocks lost most of their morning gains on Monday, dragged down by biotechs after U.S. Democratic presidential candidate Hillary Clinton said she would announce a plan to stop "price gouging" for specialty drugs.

The Nasdaq composite and the S&P 500 indexes turned negative as Biogen slipped 4.5 percent and Gilead 1.9 percent.

The S&P healthcare sector fell 1.35 percent, making it the only S&P sector index in the red. The Nasdaq biotech index slumped 4 percent.

The New York Times reported that steep price increases for specialty drugs was partly due to companies buying old, neglected drugs and turning them into "specialty drugs". (http://nyti.ms/1Yvz0Xl)

"Price gouging like this in the specialty drug market is outrageous. Tomorrow I'll lay out a plan to take it on," Clinton said in a tweet.

Before the mid-session decline, all three major indexes had risen 1 percent, with technology and financial stocks leading the gainers.

The market closed sharply down on Friday as the Federal Reserve's decision to keep rates unchanged stoked fears of slowing global economic growth.

Investors will be looking for hints on when the Fed may finally raise rates when a number of central bank officials, including Chair Janet Yellen, appear in public this week.

The Federal Reserve's decision to delay an interest rate increase last week was largely a "risk management" exercise to be sure recent market volatility would not become a drag on the economy, Atlanta Fed President Dennis Lockhart said on Monday.

Fears of slowing growth in China sparked a sharp selloff in global stock markets in recent weeks and the Fed's comments about the global economy exacerbated those concerns.

Investors are now focusing on the next Fed meeting on Oct. 27-28, though a growing number of economists now wonder whether the Fed will raise rates at all this year.

At 1:09 p.m. ET (1709 GMT) the Dow Jones industrial average was up 47.83 points, or 0.29 percent, at 16,432.41, the S&P 500 was up 2.62 points, or 0.13 percent, at 1,960.65 and the Nasdaq composite was down 18.20 points, or 0.38 percent, at 4,809.02.

Nine of the 10 major S&P sectors were higher.

Data on Monday showed that U.S. home resales fell more than expected in August. Analysts said the decline might be due to rising prices shutting out potential buyers.

Shares of GoPro were down 7.2 percent at $32.60 after Barron's said the video camera maker's shares could plunge to $25 as its latest product launch underwhelmed customers amid increasing competition.

Chipmaker Atmel jumped 13.1 percent to $8.22, a day after Dialog Semiconductor said it agreed to buy the company for about $4.6 billion.

Advancing issues outnumbered decliners on the NYSE by 1,827 to 1,149. On the Nasdaq, 1,479 issues fell and 1,265 advanced.

The S&P 500 index showed 3 new 52-week highs and 17 new lows, while the Nasdaq recorded 33 new highs and 50 new lows.

(Reporting by Tanya Agrawal; Editing by Saumyadeb Chakrabarty)