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Wall Street Ekes Out Gains as Financial and Tech Stocks Offset Health Care Weakness
16-Apr-19 16:20 ET
Dow +67.89 at 26452.66, Nasdaq +24.21 at 8000.22, S&P +1.48 at 2907.06

https://www.briefing.com/investor/markets/stock-market-update/2019/4/16/wall-street-ekes-out-gains-as-financial-and-tech-stocks-offset-health-care-weakness.htm

[BRIEFING.COM] The S&P 500 increased 0.1% on Tuesday, as strong performances from the financial and semiconductor stocks offset pronounced weakness in the health care and real estate spaces. The benchmark index traded with modest gains throughout the day and briefly dipped into negative territory with 30 minutes left of trading where it found buying interest at the 2900 level.

The Dow Jones Industrial Average increased 0.3%, the Nasdaq Composite increased 0.3%, and the Russell 2000 increased 0.2%.

The S&P 500 financial sector (+1.4%) was the day's outright leader following earnings beats from Bank of America (BAC 29.88, +0.04, +0.1%), BlackRock (BLK 466.54, +14.68, +3.3%), and Progressive (PGR 77.26, +5.00, +6.9%). BAC had declined as much as 2.8% intraday after the company missed revenue estimates and warned of a slowdown in net interest income in FY19. The turnaround in shares helped strengthen the sector's performance.

The Philadelphia Semiconductor Index (+3.2%) was another area of strength during the day and many of its components helped lift the S&P 500 information technology sector (+0.5%).

The group received a late-session boost following news that Apple (AAPL 199.25, +0.02, unch) and Qualcomm (QCOM 70.45, +13.27, +23.2%) settled their royalty dispute for a currently undisclosed amount. Prior to the news, shares of Qualcomm were little changed and finished 23.2% higher after the news.

On the other hand, burgeoning concerns about legislative efforts to curb rising health care costs continued to heavily weigh on the S&P 500 health care sector (-2.0%). An increase in U.S. Treasury yields, meanwhile, weighed on the rate-sensitive real estate (-2.4%) and utilities (-1.4%) sectors.

UnitedHealth (UNH 220.96, -9.24, -4.0%) CEO David Wichmann fueled industry concerns when he warned investors that "Medicare for All" proposals would destabilize the health care system. The political overhang caused shares, and the sector to roll over, overshadowing upbeat earnings reports from UnitedHealth and Johnson & Johnson (JNJ 138.02, +1.50, +1.1%).

U.S. Treasuries finished on a lower note, pushing yields higher across the curve. The 2-yr yield increased two basis points to 2.41%, and the 10-yr yield increased four basis points to 2.59%. The U.S. Dollar Index increased 0.1% to 97.08. WTI crude rose 0.9% to $64.04/bbl.

Reviewing Tuesday's economic data, which included the Industrial Production report for March and the NAHB Housing Market Index for April:

Industrial Production decreased 0.1% in March (Briefing.com consensus 0.2%) after an unrevised 0.1% increase in February. The capacity utilization rate decreased to 78.8% (Briefing.com consensus 79.0%) from an upwardly revised 79.0% (from 78.2%) in February.
The key takeaway from the report is that it showed continued weakness in manufacturing output, which was unchanged after a revised 0.3% decrease (from -0.4%) in February. On a yr/yr basis, manufacturing output was down 1.1% in the first quarter.
The NAHB Housing Market Index for April increased to 63 (Briefing.com consensus 63) from 62 in March.

Looking ahead, investors will receive the Trade Balance Report for February, the Fed's Beige Book for April, Wholesale Inventories for February, and the weekly MBA Mortgage Applications Index on Wednesday.

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