Healthcare stocks hit US markets

An early surge on the US stock market evaporated, as healthcare stocks tugged major indexes down.

Trader Gregory Rowe, left, works on the floor of the New York Stock Exchange (AP)
Trader Gregory Rowe, left, works on the floor of the New York Stock Exchange (AP)

Biotech companies were especially hard-hit after US lawmakers questioned the pricing of a Hepatitis C drug made by Gilead Sciences.

The Standard & Poor's 500 index raced past an all-time high in early trading, then lost steam in the afternoon. It still finished with a solid weekly gain, up 1.4%.

It might sound surprising that the stock market is trading near an all-time high with all the uncertainty surrounding China's slowing growth and simmering tensions between Russia and the west. Last week, those concerns were credited with knocking the S&P 500 index down 1.9%, its worst weekly loss in nearly two months.

This week investors seemed to return their focus to the basics.

"There are always bad things going on in the world, but they don't all matter to the ultimate direction of markets," said Douglas Cote, chief market strategist at ING US Investment Management. "The only thing that matters is the following: corporate earnings, manufacturing and the consumer. And they've all been solid."

The S&P 500 slipped 5.49 points, or 0.3%, to close at 1,866.52. It traded as high as 1,882 earlier in the day, four points above its record high reached on March 7.

The Dow Jones industrial average lost 28.28 points, or 0.2%, to 16,302.70. The Nasdaq composite dropped 42.50 points, or 1%, to 4,276.79.