By Shashwat Chauhan and Shristi Achar A
(Reuters) – The outshone its peers on Tuesday following upbeat results from health insurer UnitedHealth, while higher Treasury yields and conflict in the Middle East kept investors on edge.
Dow Component UnitedHealth Group (NYSE:) advanced 5.9% after the health insurer beat expectations for first-quarter adjusted profit.
Other health insurers such as Humana (NYSE:), CVS Health (NYSE:) and Centene (NYSE:) gained between 0.3% and 1.2%.
Morgan Stanley added 2.4% after beating first quarter profit estimates, fueled by a resurgence in investment banking.
“The early morning earnings reports were good. But more than that, the market is just searching for a bottom from its recent sell off,” said Rick Meckler, partner at Cherry Lane Investments.
“The broader market rally was really tied to a view of lower rates. And at least for now, that seems to be gone and there’s more individual stock picking based on results more than just index buying.”
Meanwhile, Israel’s war cabinet was set to meet for the third time in three days, an official said, to decide on a response to Iran’s first-ever direct attack, amid international pressure to avoid further escalation in conflicts in the Middle East.
The gains were, however, kept in check as the yield on the 10-year government bond hit fresh five-month highs, a day after data showed U.S. retail sales increased more than expected in March amid a surge in receipts at online retailers, further indicating a solid first quarter for the U.S. economy.
Several policymakers including Federal Reserve Chair Jerome Powell are slated to speak later in the day, and investors will be watching for clues on where the central bank stands on policy easing.
Fed Vice Chair Philip Jefferson said “it will be appropriate to hold in place the current restrictive stance of policy for longer” if inflation fails to slow as expected.
U.S. equities have sold off recently as investors sharply readjusted their expectations of how much the Fed would cut rates this year, with bets now showing only around 42 basis points of expected easing, according to LSEG data. This is down from about 150 bps seen at the start of the year.
Rate-sensitive real estate and utilities led sectoral declines, down around 1% each.
At 9:48 a.m. ET, the Dow Jones Industrial Average was up 87.56 points, or 0.23%, at 37,822.67, the was down 13.26 points, or 0.26%, at 5,048.56, and the was down 47.18 points, or 0.30%, at 15,837.84.
Among other stocks, Tesla (NASDAQ:) shed 3.7% after falling over 5% in the last session, when an internal memo seen Reuters via biedexmarkets.com showed the EV marker was laying off more than 10% of its global workforce.
Johnson & Johnson (NYSE:) slipped 2.0% as the drugmaker’s first-quarter revenue missed analysts’ estimates after sales from its blockbuster psoriasis drug, Stelara, fell short of expectations.
Declining issues outnumbered advancers for a 5.70-to-1 ratio on the NYSE and for a 3.50-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week highs and six new lows, while the Nasdaq recorded nine new highs and 189 new lows.
