Energy, health stocks drag U.S. indexes down

By Abhiram Nandakumar

REUTERS - Energy and healthcare stocks weighed on Wall Street as investors awaited the outcome of the U.S. Federal Reserve's two-day policy meeting.

Global markets fell and the yen rose as investors sought safe havens after the Bank of Japan's lowered inflation expectations suggested it may increase its stimulus program. [nL3N16N1BI]

"After a very strong bounce in risk assets in the recent few weeks, investors are collectively holding their breath waiting for the Fed tomorrow," said Bill Merz, investment strategist at U.S. Bank Wealth Management in Minneapolis.

The Fed is not expected to raise interest rates at its meeting, which starts on Tuesday, but its comments will be parsed for clues on the path of future hikes.

 

Investors will also keep a close eye on data this week for a reading on the health of the U.S. economy.

Data on Tuesday showed retail sales fell less than expected, but a sharp downward revision to January's sales could reignite concerns about the economy's growth prospects. [nLNNFEEC4G]

At 11:05 a.m. ET (1505 GMT), the Dow Jones industrial average <.DJI> was down 32.73 points, or 0.19 percent, at 17,196.4, the S&P 500 <.SPX> was down 10.62 points, or 0.53 percent, at 2,009.02 and the Nasdaq Composite <.IXIC> was down 27.80 points, or 0.59 percent, at 4,722.48.

Six of the 10 major S&P sectors lower, led by a near 1.5 percent fall in the energy <.SPNY> and healthcare <.SPXHC> sectors.

Oil prices continued sliding on mounting fears that a recent rally had run its course as the global glut showed no signs of abating soon. [O/R]

Shares of Chevron were off 1.7 percent at $92.68.

Eli Lilly was down 4.5 percent at $70.56 after the drugmaker narrowed the goals of a key study of its experimental Alzheimer's drug. The stock was the biggest drag on the S&P 500.[nL2N16N0R6]

Valeant Pharma was down nearly 41 percent at $41.04 after the Canadian drugmaker cut its revenue forecast for 2016. [nL3N16N3QY]

Apple was up 2.2 percent at $104.81 after Morgan Stanley said iPhone demand for March was tracking ahead of expectations.

Mead Johnson rose 10 percent to $83.02 with traders attributing gains to a report that sparked deal chatter. [nL3N16N44X]

Declining issues outnumbered advancing ones on the NYSE by 2,296 to 600. On the Nasdaq, 1,929 issues fell and 676 advanced.

The S&P 500 index showed 14 new 52-week highs and one new low, while the Nasdaq recorded 21 new highs and 29 new lows.

(Reporting by Abhiram Nandakumar in Bengaluru; Editing by Don Sebastian)