$heff's $tation of $tocks & $olid DD

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Health Stocks Fall, Hurting Dow
http://online.wsj.com/article/SB10001424052748703862704575099182351581808.html?ru=yahoo&mod=yahoo_hs

Stocks faltered, hurt by weakness in the health-care sector fueled by unpromising test results for a new Alzheimer's drug and a new call by President Obama to pass federal health-care legislation.

The market rose through most of the session, aided by favorable readings of jobs, service-sector activity, and the Federal Reserve's beige book of regional indicators. But the gains dried up late in the session.

The Dow Jones Industrial Average was up more than 60 points at its morning high but ended with a 9.22-point decline at 10396.76, off 0.3% for the year to date. The decline marked the second time in a row that the Dow failed to maintain an intraday rally that could have put it in the black for 2010.

Pfizer was the Dow's weakest component, off 1.6% after Medivation said its experimental Alzheimer's disease treatment Dimebon, which was in development with Pfizer, failed to show effectiveness in a large late-stage study. The news sent shares of Medivation, which is not a Dow stock, plunging 67.5.

Merck fell 0.5%, while Johnson & Johnson slipped 0.1% after posting gains early in the session.

The health-care sector's losses piled up late in the day after Mr. Obama said he is seeking to push the "long and wrenching debate" over health care into its final stages. Mr. Obama asked lawmakers to schedule a vote on overhaul legislation "in the next few weeks."

Health-care stocks have been sensitive to the possibility that any possible changes enacted in Washington might cut into private providers' profits. The sector picked up a bit in mid-January when Republicans picked up a 41st seat in the Senate—a development that was thought by many to dim the prospects of passage of a health bill. But investors had to reconsider the possibility that a bill might get through after all.

"A lot of the legislative news has already been priced into these stocks, so they're not exactly getting killed," said Todd Leone, head trader at Cowen & Co. "But at the same time, passage of any bill would be a negative for the sector if and when it happens. I think we're looking at about a 50-50 possibility of that at this point."