* Apple shares up ahead of results
* Amgen’s fall drags downs biotech stocks
* Celladon nosedives on lead drug’s trial failure
* Indexes down: Dow 0.2 pct, S&P 0.3 pct, Nasdaq 0.4 pct (Updates to early afternoon)
By Tanya Agrawal
April 27 (Reuters) - U.S. stocks reversed course to move lower in early afternoon trading on Monday as healthcare stocks led by Amgen dragged on the three major indexes.
The S&P Healthcare index was down 1.32 percent, with Amgen’s 3 percent drop to $163.02 the biggest drag on both the S&P 500 and the Nasdaq.
The Nasdaq Biotech index was down 3.5 percent as Celladon plunged about 81 percent to a record low of $2.62.
U.S. Food and Drug Administration staff reviewers said Amgen’s skin cancer immunotherapy cannot be considered for an accelerated review at this time, citing concerns over the design and results of a key study.
Healthcare companies have been the top performers so far in 2015, helping to push broad stock indexes to record levels, but traders are now looking to protect themselves from a selloff as they await major earnings reports in the sector.
Options on a key healthcare exchange-traded fund are set near their most defensive posture ever. Activity in puts, which can be used to hedge against a drop in shares, has picked up noticeably in April for the Health Care Select Sector SPDR ETF.
Mylan fell 5 percent to $72.25 after it rejected Teva Pharmaceutical’s unsolicited $40 billion takeover offer, saying it “grossly undervalues” the company. Teva lost 3 percent to $62.41.
At 12:54 p.m. EDT (1654 GMT) the Dow Jones industrial average was down 29.56 points, or 0.16 percent, at 18,050.58, the S&P 500 was down 5.22 points, or 0.25 percent, at 2,112.47 and the Nasdaq Composite was down 22.33 points, or 0.44 percent, at 5,069.76.
U.S. stocks rose in morning trading, with the S&P touching a new intraday high and the Nasdaq inching closer to its record intraday high ahead of Apple’s results after the close.
Investors this week will also be closely watching the results of the two-day U.S. Federal Reserve meeting, starting Tuesday, for clues on when interest rates could be hiked.
Data on Monday showed that the U.S. services sector’s expansion eased slightly in April from a seven-month high in March on a dip in new business growth.
A slew of recent sub-par indicators have prompted analysts to downgrade their view of the U.S. economic outlook and to push back expectations of when the Fed will increase rates for the first time since June 2006. Most economists now don’t see a rate hike until at least the end of the year.
Of the S&P 500 companies that have reported so far, 70.4 percent have reported earnings above analysts’ expectations. In a typical quarter, about 63 percent beat estimates.
The S&P 500 hit a record intraday high of 2,125.92. The Nasdaq hit a high of 5,119.83, the closest it has been to its record of 5,132.52 in March 2000.
Apple shares were up 1.82 percent at $132.66 in afternoon trading. Analysts expect Apple’s quarterly revenue to rise 23 percent to $56.07 billion, according to Thomson Reuters data.
Declining issues outnumbered advancing ones on the NYSE by 1,693 to 1,278, for a 1.32-to-1 ratio on the downside; on the Nasdaq, 1,891 issues fell and 823 advanced for a 2.30-to-1 ratio favoring decliners. (Editing by Savio D‘Souza)