U.S. stocks lost gains and were trading little changed on Wednesday as the White House stepped up its efforts to overhaul healthcare and bank regulation, sparking concerns about the potential impact on profits in those sectors.
The regulatory developments helped offset gains on signs of improvement in the labor market and the services sector.
The latest draft proposals to regulate the financial sector, including provisions to stop proprietary trading at banks, pressured financials, while big pharmaceutical companies fell after President Barack Obama said it is time to pass his sweeping healthcare overhaul in Congress.
As soon as the president started talking about jamming healthcare through, I think that added to some of the negative bent on equities. But it's not on tremendous volume whatsoever, said Dave Lutz, managing directors at Stifel Nicolaus in Baltimore:
He came across as saying he's going to do whatever it takes to get his agenda through, and obviously that agenda has been viewed as theoretically negative for a lot of sectors in equities, he said.
The Dow Jones industrial average <.DJI> slipped 2.34 points, or 0.02 percent, to 10,403.64. The Standard & Poor's 500 Index <.SPX> gained 1.22 points, or 0.11 percent, to 1,119.53. The Nasdaq Composite Index <.IXIC> fell 0.03 point, to 2,280.76.
Obama said it is time to pass his sweeping healthcare proposals using only a slim Democratic majority in Congress if necessary, saying the issue is too important to be delayed by politics after a year of debate.
Big pharmaceutical companies Merck & Co
Merck fell 0.6 percent to $37.15, while Pfizer dropped 1.9 percent to $17.26. Pfizer also was affected by news its Alzheimer's drug, Dimebon, did not meet the main goals of a late-stage clinical trial
Adding to the market's jitters, U.S. banks would be banned from proprietary trading and other large financial firms would face limits on such activity, according to draft language on the so-called Volcker rule from the Obama administration obtained by Reuters.
Financial company stocks lost ground, with the KBW Bank index <.BKX> down 0.6 percent. Goldman Sachs
(Editing by Kenneth Barry)