US stocks edge down as health shares slide
NEW YORK: Wall Street stocks finished a choppy session slightly lower on Wednesday (Apr 17), with health and pharmaceutical shares joining IBM in the red.
The Dow Jones Industrial Average ended down 3.12 points (0.01 per cent) at 26,449.54.
The broad-based S&P 500 slipped 6.61 points (0.23 per cent) to close at 2,900.45, while the tech-rich Nasdaq Composite Index dropped 4.15 points (0.05 per cent) to 7,996.08.
Investors were cheered early in the day by better-than-expected Chinese economic data and by a trove of mostly positive earnings.
A Federal Reserve report described the US economy as expanding at a “slight-to-moderate pace,” adding that the outlook was clouded by labour shortages and trade uncertainty.
But weakness among health and pharma shares weighed down the market, with Merck, Anthem and Eli Lilly all losing about three percent or more.
Bill Lynch of Hinsdale Associates attributed the pullback in the sector to health reform proposals by Democratic presidential candidates that could hit profits, adding that the market reaction is “probably overdone given that the election is still a year and a half away.”
Among other companies, Dow member IBM sank 4.2 per cent after first-quarter sales of US$18.2 billion lagged analyst expectations.
But PepsiCo jumped 3.8 per cent after reporting a 5.2 per cent rise in first-quarter profits to US$1.4 billion, citing strength in its Frito-Lay snack brand in North America.
United Continental gained 4.8 per cent as it reported better-than-expected earnings and reaffirming its full-year profit outlook, despite the hit from the grounding of the Boeing 737 MAX planes.