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By Stephen Culp
NEW YORK (Reuters) – U.S. stocks ended slightly higher on Tuesday, with the inching closer to its all-time high following a string of mostly positive earnings, while a drop in healthcare shares limited the advance.
All three major U.S. stock indexes ended the session in positive territory, with the S&P 500 hovering within a percentage of its record high reached in September.
Bank of America Corp (NYSE:), Johnson & Johnson (NYSE:), BlackRock Inc (NYSE:), UnitedHealth Group Inc (NYSE:) and others posted quarterly earnings that surpassed analyst expectations.
But stock movements following the reports were mixed.
“You see different numbers and different drivers,” said John Lynch, chief investment strategist for LPL Financial in Charlotte, North Carolina. “We’ve had some mixed messages from financials and healthcare.”
With reporting season in full swing, analysts now expect first quarter S&P 500 profits to have dropped 1.8% year-on-year, according to Refinitiv data. While a solid improvement over recent estimates, it would still mark the first earnings decline since 2016.
Of the 42 S&P 500 companies that have posted thus far, 81% have beaten consensus, compared with the 65% average beat rate going back to 1994.
Johnson & Johnson came in above analyst estimates, mostly attributable to sales growth at its pharmaceuticals unit, driving the stock 1.1% higher.
But UnitedHealth Group, which also reported better-than-anticipated first-quarter profit and hiked its 2019 earnings forecast, fell 4.0%, likely due to regulatory worries. The stock was the biggest drag on the Dow.
Rivals Anthem (NYSE:) Inc and Cigna Corp (NYSE:) also slid, dropping 6.8% and 7.8%, respectively.
The S&P 500 Healthcare Index closed down 2.0%
The second biggest U.S. bank by assets, Bank of America missed revenue expectations but its profit beat forecasts