Wall Street flat as healthcare decline counters chip boost
Wall Street`s main indexes were trading flat on Wednesday, as a Qualcomm-led rally in chipmakers was offset by a slide in healthcare stocks for the second straight session, although quarterly earnings came in largely positive.
Qualcomm Inc surged 10.3% 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.
Data showed China`s economy grew at a steady 6.4% pace in the first quarter, defying expectations for a further slowdown.
This helped chipmakers, which get a huge portion of their revenue from China, rally. The Philadelphia chip index jumped 1.45%.
The S&P healthcare index tumbled 2% and was on pace to wipe out its yearly gains due to ongoing concerns about potential changes to healthcare policy.
"Investors are kind of taking a step back. Q1 earnings have been fine, but there is still a decent amount of debate in the market around where do we go this year in terms of economic growth," said Mike Dowdall, a portfolio manager with BMO Global Asset Management.
"We are going to have to see earnings expectations continue to increase and an even more positive outcome from trade."
Of the 54 S&P 500 companies that have posted results so far, about 80% have beaten estimates, according to Refinitiv data.
However, analysts now expect first-quarter S&P 500 profits to drop 1.8% year-on-year. Though a solid improvement over recent estimates, it would still mark the first earnings contraction since 2016.
United Continental Holdings Inc rose 4.2% after reporting a better-than-expected jump in quarterly profit and fueled a 1.1% rise in the Dow Jones transport index.
At 11:08 a.m. ET the Dow Jones Industrial Average was up 7.04 points, or 0.03%, at 26,459.70. The S&P 500 was down 0.03 points, or 0.00%, at 2,907.03 and the Nasdaq Composite was up 7.97 points, or 0.10%, at 8,008.19.
The Nasdaq 100 touched a record intraday high, surpassing its highest level hit in early October.
Among other stocks, International Business Machines Corp fell 2.6% after reporting a bigger-than-expected drop in quarterly revenue.
Morgan Stanley rose 2% after its quarterly profit beat expectations, wrapping up earnings for big U.S. banks.
PepsiCo Inc gained 3% after its quarterly results beat Wall Street estimates.
Netflix Inc shares dipped 0.1% in volatile trading. The video streaming service provider gave a weak forecast but beat quarterly estimates.
Declining issues outnumbered advancers for a 1.01-to-1 ratio on the NYSE and for a 1.43-to-1 ratio on the Nasdaq.
The S&P index recorded 42 new 52-week highs and five new lows, while the Nasdaq recorded 56 new highs and 36 new lows.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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