Wall Street dips as healthcare stocks slide again
(Reuters) – U.S. stocks gave up early gains to trade marginally lower on Wednesday, as healthcare stocks continued a decline from the previous session, countering a rally in chipmakers led by Qualcomm and robust economic data out of China. FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New…
(Reuters) – U.S. stocks gave up early gains to trade marginally lower on Wednesday, as healthcare stocks continued a decline from the previous session, countering a rally in chipmakers led by Qualcomm and robust economic data out of China.
The S&P healthcare index fell 1.7% as insurers and hospital operators dropped on ongoing concerns about potential changes to healthcare policy. The sector is on track to wipe out year-to-date gains.
China’s economy grew at a steady 6.4% pace in the first quarter, defying expectations for a further slowdown, adding to optimism that the economy may be starting to stabilize even as Beijing and Washington appear moving closer to a trade deal.
Qualcomm Inc surged 15.1% after the company won a major victory in its legal dispute with Apple Inc that called for the iPhone to once again use Qualcomm modem chips.
The Philadelphia chip index jumped 2.65%, and the broader technology sector gained 0.65%.
“We’ve had a tailwind from Chinese economic data, and in general earnings reports have been mixed, but for the most part it was better-than-feared,” said Art Hogan, chief market strategist at National Securities in New York.
“We’ve bounced up to a level where we are pretty fairly valued and we are going to need something significantly new like the U.S.-China trade deal for a higher estimate in 2019.”
United Continental Holdings Inc rose 5% after reporting a better-than-expected jump in quarterly profit and fueled a 1.4% jump in the Dow Jones transport index.
The Nasdaq 100 touched a record intraday high, surpassing its highest level hit in early October.
At 10:10 a.m. ET, the Dow Jones Industrial Average was down 48.06 points, or 0.18%, at 26,404.60. The S&P 500 was down 4.58 points, or 0.16%, at 2,902.48 and the Nasdaq Composite was down 10.60 points, or 0.13%, at 7,989.62.
International Business Machines Corp fell 4.1%, and weighed on the Dow, after reporting a bigger-than-expected drop in quarterly revenue.
Of the 54 S&P 500 companies that have posted so far, about 80% have beaten estimates, according to Refinitiv data.
Analysts now expect first-quarter S&P 500 profits to have dropped 1.8% year-on-year. Though a solid improvement over recent estimates, it would still mark the first earnings contraction since 2016.
Among other earnings, Morgan Stanley rose 1.4% after its quarterly profit beat expectations, wrapping up earnings for big U.S. banks.
PepsiCo Inc rose 2% after quarterly results beat Wall Street estimates.
Netflix Inc shares fell 1.5 percent in volatile trading. The video streaming service provider gave a weak forecast but beat quarterly estimates.
Advancing issues outnumbered decliners by a 1.87-to-1 ratio on the NYSE and by a 1.25-to-1 ratio on the Nasdaq.
The S&P index recorded 35 new 52-week highs and two new lows, while the Nasdaq recorded 48 new highs and nine new lows.
Reporting by Amy Caren Daniel, Sruthi Shankar and Shreyashi Sanyal in Bengaluru; Editing by Sriraj Kalluvila