(Adds U.S. market open, byline, dateline; previous LONDON)
* Pharma stocks fall after Trump says he will cut drug
* Rate expectations underpin dollar, eyes on trade data
* Oil prices firm, in tight range as stockpile data awaited
By Herbert Lash
NEW YORK, March 7 Wall Street stocks slipped on
Tuesday, led by a decline in healthcare stocks after a tweet
from U.S. President Donald Trump on the need to lower drug
prices, while expectations the Federal Reserve will raise
interest rates supported the U.S. dollar.
Shares of large U.S. pharmaceutical and biotechnology
companies sold off after President Donald Trump said he was
working on a "new system" to reduce prices in the industry.
Shares of Pfizer Inc and Merck & Co shed 1.1
percent, and Amgen Inc dropped 1.4 percent.
The U.S. dollar edged up 0.09 percent against a
basket of six major trading currencies and gained 0.11 percent
against the Japanese yen ahead of the Fed's meeting next
The monthly U.S. jobs report, due on Friday, is expected to
show an increase of 186,000 jobs, probably enough to push the
Fed to raise its base rate again for the second time in three
U.S. Treasury yields rose on Tuesday, supporting the U.S.
dollar, as data showed the U.S. trade deficit grew in January to
its widest monthly level in nearly five years.
The benchmark 10-year Treasury yield was up
nearly 2 basis points at 2.511 percent, while two-year yield
edged up 1 basis point at 1.322 percent.
The market is taking in stride, unlike past years,
expectations the Fed will raise rates, said Rahul Shah, chief
executive of Ideal Asset Management in New York.
"As long as we keep getting macroeconomic data that's
supportive of a rate hike we're going to continue to see stocks
rally," Shah said. "If financials continue to rally with higher
rates and industrials rally with better economic data, that
could be enough to power the market higher," he said.
The Dow Jones Industrial Average fell 2.73 points, or
0.01 percent, to 20,951.61. The S&P 500 lost 3.04 points,
or 0.13 percent, to 2,372.27 and the Nasdaq Composite
added 1.76 points, or 0.03 percent, to 5,850.93.
The S&P 500 healthcare index dropped 0.65 percent,
setting it up for its worst day in more than five weeks.
Stocks in Europe traded slightly lower as weak corporate
earnings and the biggest fall in German industrial orders since
the depths of the global financial crisis weighed on sentiment.
Europe's FTSEurofirst index of the 300 leading
regional shares fell as much as 0.31 percent, pulled
down by healthcare and financial stocks.
MSCI's all-country world stock index fell
Brent crude added 17 cents at $56.18 a barrel while
U.S. West Texas Intermediate (WTI) crude rose 19 cents at
$53.39. Both benchmarks had traded in negative and positive
territory since the start of the day's Asian session.
U.S. Treasury yields rose with the 30-year yield at its
highest in more than a month as investors made room for this
week's supply of coupon-bearing government debt led by $24
billion worth of three-year notes.
Investors also reduced their bond holdings in anticipation
of a rate increase from the Fed's policy meeting next week.
Benchmark 10-year Treasury notes fell 6/32 in
price to yield 2.5142 percent, while the 30-year yield
was up nearly 2 basis point at 3.116 percent after
touching its highest level since Feb. 3, Reuters data showed.
Gold slipped 0.64 percent to $1,217.70 an ounce.
(Reporting by Herbert Lash; editing by Clive McKeef)