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Stocks Close Flat After Obama, Beige Book

NEW YORK ( TheStreet) -- Stocks closed flat Wednesday, despite improving signs for the economy in data and the Federal Reserve's beige book, after President Obama called on lawmakers to push forward on health care reform.

The beige book, which examines anecdotal economic conditions throughout the country, was released at 2 p.m. EST. The report found that while economic activity remains slow, the 12 districts reported modest improvements that were more widespread than the central bank's last report. The beige book, which will be used as a reference for the Federal Open Market Committee's meeting on March 16, also found housing and labor markets remain weak, and price pressures continue to be subdued.

But in a speech at about the same time, President Obama urged Congress to schedule a final vote on a health care bill, saying that the debate over the legislation has run its course.

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Stocks sank soon after. The Dow Jones Industrial Average, which was up more than 50 points earlier in the session, lost 9 points, or 0.1%, at 10,397. The S&P 500 added about half a point to 1119, and the Nasdaq finished largely flat at 2281.

Though the sell-off was broad, health care stocks also lost ground soon after the president's speech, with the NYSE Health Care Sector Index slumping 0.2%. Some major drug manufacturers finished in the red. Passage of a reform bill could spell mounting fees on the pharma industry.

Already lagging because of a disappointing phase III study with partner Medivation (MDVN), Pfizer (PFE) turned in the Dow's worst performance of the session. Fellow blue-chips Merck (MRK) and Johnson & Johnson (JNJ) lost 0.5% and 0.1%, respectively.

Financial and chip stocks also struggled Wednesday, as the KBW Bank Index and the Philadelphia Semiconductor Index lost 0.4% and 0.9%, respectively.

Shares of Ford (F), Citigroup (C) and Bank of America (BAC) saw the highest volume on the New York Stock Exchange, which had a listed volume of nearly 4 billion.

The major averages had posted modest gains earlier in the day on strong data and an emerging plan to address Greece's debt problem.

In response to calls from eurozone leaders for significant deficit-reduction measures, Greek Prime Minister George Papandreou approved a 4.8 billion euro ($6.5 billion) austerity plan that includes public sector pay cuts, reductions to government spending on public works and steep tax increases.
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