(Reuters) – U.S. stocks treaded water on Tuesday, as a surge in healthcare companies fizzled out and ahead of earnings reports from other big names including Netflix.
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., April 8, 2019. REUTERS/Brendan McDermid
Johnson & Johnson pared gains and was up 1.8%, while insurer UnitedHealth Group Inc reversed course to trade down 4.5%, pulling the healthcare sector 1.1% lower.
Both the Dow components beat quarterly estimates and raised their forecasts, but UnitedHealth was weighed down by concerns over the impact of a possible overhaul of the rebate system.
“There has been plenty of volatility below the surface, where UnitedHealth’s earnings saw the stock drop back sharply after the open, robbing the Dow of most of its gains, as policy uncertainty saw investors take the chance to exit the stock,” said Chris Beauchamp, chief market analyst at IG.
Bank of America Corp declined 0.6% after quarterly revenue fell short of expectations. The results come after Goldman Sachs Group Inc and Citigroup Inc on Monday also disappointed with quarterly revenue misses.
“Investors are now, it seems, bored of U.S. bank earnings and are keen to see what Netflix has to offer, with earnings from the streaming giant likely to spark greater volatility than those from Bank of America.”
Of the 42 S&P 500 companies that have reported so far, 81% have topped estimates, above the 76% average of the past four quarters, according to Refinitiv data.
Analysts now expect S&P 500 companies to post a 1.8% year-on-year decline in profits, an improvement from the 2.3% fall expected a week ago, but still the first annual decline in earnings since 2016.
At 12:42 p.m. ET, the Dow Jones Industrial Average was up 34.89 points, or 0.13%, at