Healthcare stocks drag US markets lower

US stocks retreated on Wednesday led by health care stocks as lawmakers criticize Mylan for raising the price of allergy drug EpiPens. The dollar strengthened as market participants await the comments of Fed Chair Janet Yellen at Federal Reserve’s summer symposium in Jackson Hole, Wyoming on Friday. Live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, rose 0.26% to 94.749. The Dow Jones industrial average slipped 0.4% to 18481.48, with shares of UnitedHealth and Merck, each down more than 1%, pulling the blue chip index into negative territory. The S&P 500 closed 0.5% lower at 2175.44, led by 1.6% loss in health care stocks. Both the broad market index and the Dow closed at two week low. The Nasdaq composite index dropped 0.8% to 5217.69, the worst daily slump in three weeks. Economic news were also not supportive for higher risk appetite while investors refrained from making big bets ahead of Fed Chair Yellen’s speech. Markets expect Fed Chair will provide clues on timing of rate hikes this year. July sales of previously owned homes fell 3.2% to annual rate of 5.39 million, steeper than the expected decline of 1.1%. Investor will focus on Yellen’s speech tomorrow which may result in increased volatility. Today at 13:30 CET Initial Jobless Claims and Continuing Claims, and July Durable Goods Orders will be released in US. The tentative outlook is positive. At 15:45 CET advance Services and Composite PMIs for August will be released by Markit, the outlook is positive. At 16:30 CET Natural Gas Storage Change will be released by the Energy Information Administration. And Kansas City Fed Economic Symposium will start today at Jackson Hole, Wyoming.

European stocks advanced on Wednesday with financial shares leading the indexes while mining stocks slumped due to falling commodity prices. The euro weakened and the Pound edged higher against the dollar. The Stoxx Europe 600 rose 0.4%, the third winning session in a row. Shares of Commerzbank rallied 3.2% and UBS gained 2.9%. Shares of Glencore tumbled 3.1% after the mining giant reported a loss for the first half of the year. Germany’s DAX 30 index closed 0.3% higher at 10622.97. The final reading of second quarter German GDP confirmed the economy grew 0.4%, down from the 0.7% growth rate recorded in the first quarter. France’s CAC 40 gained 0.3% while UK’s FTSE 100 lost 0.5%. Today at 10:00 CET August Ifo Business Climate Index, Current Assessment and Expectations Indexes will be released in Germany. The tentative outlook is positive. At 12:00 CET August Retail Sales will be released in UK by the Confederation of British Industries. The tentative outlook is negative.

Asian stocks are lower today with Chinese stocks retreating after the central bank changed the supply of short term financing to cool investments in bonds and limit risks in the financial system. Hong Kong’s Hang Seng Index is up 0.1% while Shanghai Composite Index is down 0.5%. Australia’s S&P ASX 200 closed 0.36% lower as Australian dollar strengthened. Nikkei fell 0.2% in thin trading as the dollar remained above the 100 yen level.

Oil futures prices are extending losses today after the US Energy Information Administration reported Wednesday crude oil stocks rose by 2.5 million barrels to 523.6 million barrels, a level 16% higher than a year ago. October Brent crude fell 1.8% to $49.05 a barrel on London’s ICE Futures exchange on Wednesday.