Pharma sell-off cuts short Wall St. rally

A sell-off of drug company stocks put a hold on Wall Street's two-week-long rally on Tuesday.

But beer shares got a boost from the $122 billion merger announced by Anheuser-Busch InBev and SABMiller.

The Dow Jones Industrial Average finished down 49.97 points (0.29 percent) at 17,081.89.

The broad-based S&P 500 dropped 13.77 (0.68 percent) to 2,003.69, while the tech-rich Nasdaq Composite Index fell 42.03 (0.87 percent) to 4,796.61.

"The market's gone up every day basically for one week and a half, so it's entitled to a small down day," said Mace Blicksilver of Marblehead Asset Management.

"The news is certainly nothing that exciting that would get people to buy stocks at these higher levels, but there's a very solid support in the market."

Pharmaceuticals, a large part of the markets' staying positive on Monday, were heavily sold. Novartis lost 1.5 percent, Merck 2.5 percent, Amgen 3.6 percent, and Regeneron 3.6 percent.

On the Dow, United Technologies fell 1.2 percent and IBM 1.0 percent, while UnitedHealth topped gainers, adding 1.2 percent.

The massive AB InBev-SABMiller deal, which will create a company which sells about one out of every three beers drunk in the world, sent the US-traded shares of AB InBev up 2.1 percent.

The bigger beneficiary was Molson Coors Brewing, which surged 9.9 percent on expectations that SABMiller will have to sell its holdings in US brewer MillerCoors to Molson Coors to please antitrust investigators.

Twitter shares added 1.1 percent as the company announced it would lay off eight percent of its workforce as part of a strategy to build income.

The cuts -- which amount to 336 jobs -- come less than a week after Jack Dorsey, one of the founders of Twitter, returned to the job of CEO on a permanent basis as part of an effort to revive growth at the San Francisco-based social network.

Video streamer Netflix meanwhile lost 3.3 percent ahead of its quarterly earnings release.

Bond prices rose. The yield on the 10-year US Treasury fell to 2.06 percent from 2.09 percent Friday, while the 30-year dipped to 2.90 percent from 2.92 percent. Bond prices and yields move inversely.