Stocks mostly fell on Wednesday, retreating from a two-day rally, as Pfizer's disappointing outlook and the president's commitment to bank and healthcare reform weighed on the financial and health sectors.

Pfizer Inc
fell 2.5 percent to $18.58 and led a broad decline in several health-related sectors after the world's biggest drugmaker reported quarterly earnings that missed estimates and forecast profits below expectations.

President Obama reiterated his commitment to overhaul the healthcare system and impose stricter regulatory reforms on Wall Street, underscoring the political risk that has driven U.S. stocks lower in recent weeks.

Political factors are definitely putting a cloud over the market again, and (this) is probably going to put a lid on a rally for awhile until we get some clarity on these reforms, said Scott Marcouiller, senior equity market strategist at Wells Fargo in St. Louis.

The Dow Jones industrial average <.DJI> was down 21.91 points, or 0.21 percent, at 10,274.93. The Standard & Poor's 500 Index <.SPX> fell 7.11 points, or 0.64 percent, at 1,096.21. But the Nasdaq Composite Index <.IXIC> was flat at 2,190.06, even with Tuesday's close.

Banking stocks dropped as concerns resurfaced about the administration's intent to limit trading activities at some big banks. Morgan Stanley , which has a large trading arm, fell 1 percent to $27.78. The KBW bank index <.BKX> fell 2.5 percent.

Health insurers' stocks also fell, with Cigna Corp down 1.5 percent at $34.73, and UnitedHealth Group Inc off 2.4 percent at $33.22.

The Morgan Stanley Healthcare Payor Index <.HMO> fell 1.4 percent.

Among the biggest drags on the Nasdaq was the stock of Gilead Sciences Inc , down 2 percent at $47.59. The biotechnology company is a leading developer of drugs to treat infection with HIV, the virus that causes AIDS.

MetLife Inc shares slid 3.7 percent to $35.01 as the biggest U.S. life insurer faced a possible credit downgrade, a day after the company confirmed it was in talks, but had not reached a deal to buy a unit of American International Group Inc .

Logistics companies' shares weighed on the transport sector after Ryder System Inc and C.H. Robinson Worldwide Inc reported weaker-than-expected profits and Ryder tumbled 8.7 percent to $34.08, and C.H. Robinson lost 6.7 percent to $53.60.

The Dow Jones transportation average <.DJT> lost 1.4 percent.

The day's political developments dominated the market's tone, overshadowing the broader economic picture.

The Institute for Supply Management said its services index rose to 50.5 in January from 49.8 in December, marking a return to growth, but below the 51.0 median forecast of economists surveyed by Reuters.

A report by ADP Employer Services showed the pace of U.S. job losses in the private sector slowed in January, as employers reported the smallest payroll decline in nearly two years.

(Reporting by Angela Moon; Editing by Jan Paschal)