Pharma stocks hit as US, European equities fall

New York - Hospital companies and pharmaceuticals were among the losers on Wall Street on Tuesday as US stocks fell with the introduction of the Republican health-care proposal in Congress.

The decline in US stocks, the second in a row, came as equity markets in Paris, London, Frankfurt and Tokyo also fell modestly.

Markets are "taking a very cautious attitude," said Peter Cardillo, chief market economist at First Standard Financial.

In the US, health care was back in focus as Republicans unveiled legislation which would dismantle several core aspects of former president Barack Obama's health law.

The bill drew criticism from progressives and some leading conservatives, raising questions about its prospects. Still, hospital companies Universal Health Services and Tenet Healthcare lost 2.2% and 7.1%, respectively, on worries about cutbacks.

Pharmaceutical stocks also retreated after President Donald Trump said he was working on a system to boost price competition. Pfizer, Mylan and Celgene all lost at least one percent.

"Donald Trump has ensured he remains the number one driver of volatility within the markets, with the president's latest tweet dragging pharmaceutical firms lower today," said market analyst Joshua Mahony at online trading firm IG.

Shares in European pharmaceutical makers also suffered.

In London, Shire fell 2.3% to £49.03, AstraZeneca shed 1.0% at £21.15, and GSK dipped 0.6% to £16.75.

Awaiting ECB, jobs data

Overall, trading in European stock markets was calm on Tuesday as investors waited on this week's interest rate call in the eurozone and crucial jobs data in the United States.

The European Central Bank will unveil the outcome of its latest monetary policy gathering on Thursday, with no change expected in borrowing costs.

Traders will then zero in on this Friday's eagerly anticipated US non-farm payrolls (NFP) data, a key job market indicator for the health of the world's biggest economy, ahead of next week's Federal Reserve interest rate meeting.

Many analysts expect the Fed to hike rates unless the jobs report is very disappointing.

The Fed meeting comes amid skepticism about the likelihood of action on US tax cuts and other growth policies that have been the a catalyst in a series of stock market records since the November US presidential election.

In recent days, more analysts have begun to discuss a longer time horizon for implementation of key aspects of Trump's agenda. Barclays cited the health policy debate, as well as probes into Trump's relationship with Russia, as a reason to revise its forecasts for 2017 and 2018.

"The administration continues to spend time and political capital in ways we did not anticipate," Barclays said in the note last week.