Wall Street falls on broad weakness, Pfizer drags

By Chuck Mikolajczak

NEW YORK (Reuters) - U.S. stocks fell on Monday, putting the S&P 500 on track for its biggest three-day drop in two months, as investors rotated into defensive names to protect against further declines.

Momentum shares - stocks in fast-growing industries which had seen their stock prices rocket higher in recent weeks - managed to stabilize after their decline helped fuel a sell-off on Friday. But selling pressure migrated to other sectors, with only defensives such as utilities and consumer staples

in positive territory among the 10 major S&P sectors.

"We are definitely seeing a little more downside, a continuation from the nasty reversal on Friday," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati, Ohio.

"The big concern is the overall underlying weakness in so many different stocks. The picture isn't nearly as pretty when you look under the hood and you see various sectors have clearly broken down and now it's starting to pull down on the whole entire stock market."

Pfizer Inc , which was down 3 percent to $31.17, added pressure to the Dow and S&P 500. The company's experimental breast cancer drug in a clinical trial nearly doubled the amount of time patients lived without their disease getting worse, but overall survival was not yet shown to be statistically significant, researchers said.

The Dow Jones industrial average was down 126.35 points, or 0.77 percent, at 16,286.36. The Standard & Poor's 500 Index was down 14.26 points, or 0.76 percent, at 1,850.83. The Nasdaq Composite Index was down 39.89 points, or 0.97 percent, at 4,087.83.

Earnings season gets under way this week, with results due from financials JPMorgan Chase & Co and Wells Fargo & Co , as well as retailer Bed, Bath & Beyond .

S&P 500 companies' first-quarter earnings are projected to have increased just 1.2 percent from a year ago, Thomson Reuters data showed. The forecast is down sharply from the start of the year, when growth was estimated at 6.5 percent.

A lackluster first-quarter earnings season hurt by a harsh winter could spark a pullback, some analysts said, with investors more optimistic for the second quarter.

Specialty pharmaceuticals company Mallinckrodt Plc agreed to buy drugmaker Questcor Pharmaceuticals Inc for about $5.6 billion to gain access to its multiple sclerosis drug, Acthar Gel. Questcor shares climbed 13.5 percent to $77.05 while Mallinckrodt dropped 9.4 percent to $56.65.

Energen Corp said it would sell its natural gas utility Alabama Gas Corp (Alagasco) to Laclede Group Inc for $1.28 billion in cash to focus on oil and gas exploration and production. Energen shed 0.5 percent to $81.13 and Laclede lost 1.2 percent to $45.66.

MannKind Corp slumped 10 percent to $6.18. The company said the U.S. Food and Drug Administration extended the review date of its inhaled insulin treatment by three months.

(Editing by Nick Zieminski and Bernadette Baum)