Wall Street slides, dragged down by healthcare

Plunging healthcare stocks dragged Wall Street lower on Wednesday, offsetting a spate of upbeat corporate earnings and encouraging economic data from the United States and China.

All three major U.S. stock indexes were down, but the S&P 500 slipped to more than a percent below its record high reached in September.

The healthcare sector was on track for its biggest percentage drop in four months, falling 3.3% on regulatory jitters.

UnitedHealth Group Inc, Pfizer Inc and Merck & Co Inc dropped from 2.8% and 3.9%, and were among the biggest drags on the broader S&P 500.

"The fear among healthcare stock owners is some move to `Medicare for all,`" said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. "The movement towards something like that seems unstoppable."

The sector`s drop dampened generally upbeat earnings from a broad range of sectors.

Morgan Stanley rose 2.4% after beating analyst estimates due to cost-cutting and growth in its wealth management segment.

United Continental Holdings Inc advanced 4.6% following Tuesday`s after-market earnings report, where the airliner bested consensus estimates and held its 2019 profit target firm, even as Boeing Co`s 737 MAX jets remain grounded.

Robust business jet demand drove Textron Inc`s earnings beat, driving its stock up 4.2%.

PepsiCo Inc reported better-than-expected first-quarter sales on strong North American demand. The packaged food company`s shares were up 3.3%.

With reporting season in high gear, analysts now expect first-quarter S&P 500 profits to have dropped 1.8% year-on-year, according to Refinitiv data, which would mark the first earnings decline since 2016.

Of the 54 S&P 500 companies that have posted thus far, 79.6% have beaten consensus, compared with the 65% average beat rate going back to 1994.

"This has turned into a decent earnings season," Tuz added. Revenues have been OK and you haven`t heard guidance that things are getting softer."

The Dow Jones Industrial Average fell 35.34 points, or 0.13%, to 26,417.32, the S&P 500 lost 9.85 points, or 0.34%, to 2,897.21 and the Nasdaq Composite dropped 18.62 points, or 0.23%, to 7,981.61.

Of the 11 major sectors in the S&P 500, six were trading in the black.

Qualcomm Inc jumped 12.0% after the chipmaker settled its long-running legal battle with Apple Inc. Apple shares edged 1.6% higher.

The news boosted the Philadelphia SE Semiconductor index, which rose 1.5%.

On the economic front, the U.S. trade deficit dropped to an eight-month low in February due to a 20.2% plunge in imports from China. The trade balance with China, a focus of President Donald Trump`s trade policy, showed the deficit shrinking by 28.2%.

China, meanwhile, saw its first-quarter GDP grow at a better-than-expected 6.4% annual rate, adding to optimism that the world`s second-largest economy might be starting to stabilise.

Declining issues outnumbered advancing ones on the NYSE by a 1.32-to-1 ratio; on Nasdaq, a 1.73-to-1 ratio favoured decliners.

The S&P 500 posted 45 new 52-week highs and five new lows; the Nasdaq Composite recorded 64 new highs and 58 new lows.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)