JNJ Johnson and Johnson

By Mark DeCambre and Victor Reklaitis, MarketWatch

The IBB is on track for its worst daily drop since the U.K.'s vote to exit from the European Union

The Dow industrials and the S&P 500 on Wednesday hit all-time highs in intraday trade ahead of key meetings of European and U.S. central banks that have kept investors on a cautious footing. A tumble in shares of health-care companies after comments from the U.S. president-elect and back-to-back declines in crude-oil prices also has kept the market 's advance in check.

But a modest climb higher has been sufficient to help the main indexes to notch fresh records.

The Dow Jones Industrial Average set an all-time trading high of 19,276.25 and most recently was trading up 10 points, or less than 0.1%, at 19,264, on track for its third consecutive record close. A 1% rise in shares of Goldman Sachs Group(GS) helped to support the blue-chip benchmark, while a slump in health-care shares of Johnson & Johnson(JNJ)Pfizer Inc.(PFE), and Merck & Co. Inc.(MRK), tumbled after President-elect Donald Trump threatened to cut drug prices (http://www.marketwatch.com/story/president-elect-trumps-promise-to-bring-down-drug-prices-sends-biotech-etfs-slumping-2016-12-07). "I'm going to bring down drug prices," Trump told Time in his "Person of the Year" cover story (http://time.com/time-person-of-the-year-2016-donald-trump/). "I don't like what has happened with drug prices."

The iShares Nasdaq Biotechnology ETF(IBB), the most widely used way to place bets on the biotech space, sank 4.5%, and was on track for its worst daily decline since after the U.K. vote to abandon its membership with the European Union roiled markets in late June, according to FactSet data.

The IBB's drop weighed on the Nasdaq Composite Index which was the worst performer among the three main benchmarks, down 0.2% at 5,322.

Meanwhile, the S&P 500 index set an intraday trading high of 2,214.74, exceeding its intraday high set Nov. 30, and was most recently up less than 0.1%, at 2,213, with all but one of the S&P 500's 11 sector in positive territory. Health-care led the way lower, with a 1.8%, decline.

On Tuesday, the S&P 500 finished 0.3% higher, the Dow gained 0.2% and finished at an all-time high for a second straight session (http://www.marketwatch.com/story/dow-reaches-for-a-fresh-record-but-itll-be-a-struggle-2016-12-06), and the Nasdaq Composite added 0.5%.

The stock market's postelection climb has been underpinned by hopes that Trump will follow through with a slate of pro-business policies, including boosting infrastructure spending and cutting taxes for the wealthy. However, some strategists and traders are concerned that a pullback (http://www.marketwatch.com/story/gundlach-says-the-trump-trade-is-losing-steam-2016-12-02) might be in the offing because the market has climbed too fast and too furiously.

"It appears that nothing can stop the equity rally," said Naeem Aslam, chief market analyst at ThinkMarkets UK, in a note.

"If you look at the volatility index, it has dropped near the 11 handle, which confirms that appetite for riskier assets is strong," he added, referring to the CBOE Volatility Index . "Buying volatility at these levels may not be that much of a bad idea."

Other strategist say the market has traded in a relatively narrow range since 2014 and make the case that for that reason the recent monthlong Trump rally has a shot at moving higher into the end of the year.

"It has only been about four weeks since the breakout for stocks and a lot of people are looking at this to be quickly aborted, but the market shouldn't be faulted for expecting more," said Bruce Bittles, chief investment strategist at brokerage firm Robert W. Baird & Co., a brokerage.

Another factor that may be supporting stock gains is traditional selling patterns that occur at the end of the year aren't being followed because investors are making bets on lower taxes under a Trump administration. "Anyone who has gained [in December] are not going to want to sell their stocks and pay taxes in April 2017, when they can wait till 2018," he said. Of course taxes on profits from the sale of assets could be higher then, but Bittles says Wall Street traders are betting that it makes more sense to wait and see, which is reducing traditional selling of stocks to take year-end profits and encouraging buying.

Read:Why the rally by U.S. stocks is 'just getting started'--in one chart (http://www.marketwatch.com/story/why-the-rally-by-us-stocks-is-just-getting-started-in-one-chart-2016-11-28)

Other markets:European stocks (http://www.marketwatch.com/story/credit-suisse-miners-push-stoxx-europe-600-toward-highest-close-since-september-2016-12-07) gained, with banks and miners among the session's big winners, and Asian markets closed broadly higher (http://www.marketwatch.com/story/bank-stocks-surge-as-asian-markets-post-gains-2016-12-06). Oil futures (http://www.marketwatch.com/story/oil-prices-continue-to-backtrack-as-investors-question-opec-deal-2016-12-07) retreated, while gold futures and a key dollar index (http://www.marketwatch.com/story/dollar-flattens-out-as-investors-look-ahead-to-fed-ecb-meetings-2016-12-07) were modestly higher.

Individual stocks: Ahead of the opening bell, Brown-Forman Corp.(BFA) reported quarterly sales that topped estimates (http://www.marketwatch.com/story/brown-forman-sales-top-estimates-sticks-with-full-year-view-2016-12-07), as the maker of Jack Daniel's whiskey backed its full-year forecast. The stock wasn't yet active in premarket trade.

Handbag seller Vera Bradley Inc.(VRA) cut its full-year outlook (http://www.marketwatch.com/story/vera-bradley-shares-slump-as-company-cuts-outlook-2016-12-07) after missing its own guidance range for the third quarter. Shares were tumbling 7% in early trade.

Economic news: A report on consumer credit is due at 3 p.m. Eastern.

The JOLTS report, or Job Openings and Labor Turnover Survey, showed that job openings were unchanged at 5.5 million in October, according to Labor Department.

Investors also are bracing for the European Central Bank's policy-setting meeting (http://www.marketwatch.com/story/how-italys-no-vote-might-be-the-ecbs-silver-lining-2016-12-05) on Thursday. The Federal Reserve entered the so-called blackout period Tuesday ahead of its meeting Dec. 13-14, so there are no Fed speakers on the docket.

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(END) Dow Jones Newswires

December 07, 2016 11:33 ET (16:33 GMT)

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