Investing.com -- U.S. stocks fell slightly on Wednesday as a sell-off among Health Care and Biotechnology stocks offset gains from a GM and Boeing-inspired rally.
Shares in Valeant Pharmaceuticals International Inc (N:VRX) fell as much as 25% after a report from short-seller Citron Research accused the $50 billion pharmaceutical giant of a wide range of improprieties, including creating fake invoices for deceiving auditors and booking artificially high revenues. Separately, the company disclosed on Wednesday that it has recently been served subpoenas by the U.S. Attorney's Office in Massachusetts and the Southern District of New York stemming from investigations into the pricing information it provided to the Centers for Medicare and Medicaid Services.
The Dow Jones Industrial Average reversed territory late in Wednesday's session to close lower, while weakness in the Health Care sector weighed heavily on both the NASDAQ Composite index and the S&P 500 Composite index. The Dow lost 48.50 or 0.28% on Wednesday to close at 17,168.61, while the NASDAQ fell by 40.85 or 0.84% to end the session at 4,840.12.
On the S&P 500, all 10 sectors closed in the red, as it fell 11.83 or 0.58% to 2,018.94. Stocks in the Energy, Basic Materials and Health Care industries lagged. All three major indices still remain on track to end the month with their strongest October in four years.
Valeant categorically denied Citron's report on Wednesday afternoon, dismissing it as an attempt to profit off the current investigation. Shares in Valeant closed down by nearly 20% at $118.32.
"Citron's false and misleading statements about Valeant appear to be an attempt to manipulate the market in an effort to drive down Valeant's stock price," the company said in a written statement.
Elsewhere, several major health insurers traded in negative territory for most of the session, after U.S. presidential candidate Hillary Clinton expressed serious concern on the ramifications of two proposed mergers in the industry. While discussing Aetna Inc 's (N:AET) attempt to acquire Humana Inc (N:HUM), as well as Anthem Inc's (N:ANTM) planned acquisition of Cigna Corporation (N:CI), Clinton said she is skeptical that consumers will benefit from the deals.
UnitedHealth Group Incorporated (N:UNH), another top U.S. health insurer, fell almost 2% to 118.10, ending the session as one of the worst performers on the Dow. United Technologies Corporation (N:UTX), meanwhile, closed on Wednesday as the Dow's top performer, one day after posting stronger than expected third quarter results. Shares in United Technologies (N:UTX) rose by 2.43 or 2.54% to 98.05. BA also finished as one of the top performers on the Dow, after its third quarter profits surged by 25% on a yearly basis.
The biggest gainer on the NASDAQ was KLA-Tencor Corporation (O:KLAC), which jumped 10.12 or 18.79% to 63.98. Earlier on Wednesday, the semiconductor company acquired water fabrication supplier Lam Research (O:LRCX) for $10.6 billion or $32 a share. The worst performer was VimpelCom (O:VIP), which fell 0.28 or 6.93% to 3.76.
KLA-Tencor (O:KLAC) was also the top performer on the S&P 500, just ahead of GM, which soared 2.06 or 6.16% to 33.54. On Wednesday morning, the auto giant reported record third quarter earnings of 1.50 per share, an increase of 55% from the same quarter in 2014. The earnings surge came as its profit margin increased in China and demand surged among its large pickup trucks and sports utility vehicles. The poor session from Valeant also triggered a sell-off in shares of Endo International, which fell by more than 13% to 54.15.
After its IPO was priced at $52 on Tuesday, Ferrari NV (N:RACE) ended its Wall Street debut at $55, up 5.77% on the session. At one point, the luxury sports car manufacturer soared as much as 15% on the day.
On the New York Stock Exchange, declining issues outnumbered advancing ones by a 2,192 to 895 margin.