© Reuters. Traders work on the floor at the NYSE in New York
By Amy Caren Daniel and Sruthi Shankar
(Reuters) – 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 (NASDAQ:) Inc surged 10.3% after the company won a major victory in its legal dispute with Apple Inc (NASDAQ:) 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 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.