Wall Street closed lower on Wednesday as stiff loses of the healthcare sector negated the positive impact of strong first quarter earnings results. Moreover, investors waited for special counsel Robert Muller's report to be released on Thursday regarding Russian intervention into the 2016 U.S. Presidential election. Market participants remained concerned that the report may generate volatility on Wall Street. All three major stock indexes ended in the red.
The Dow Jones Industrial Average (DJI) closed at 26,449.54, declining 3.12 points. The S&P 500 Index (INX) shaded 0.2% points to close at 2,900.45. However, the Nasdaq Composite Index (IXIC) closed at 7,976.08, losing 0.1%. A total of 7.07 billion shares were traded on Wednesday, higher than the last 20-session average of 6.84 billion shares. Decliners outnumbered advancers on the NYSE by 1.39-to-1 ratio. On the Nasdaq, decliners had an edge over advancers by 1.74-to-1 ratio. The CBOE VIX decreased 3.5% to close at 12.60.
How Did the Benchmarks Perform?
The Dow ended in negative territory with 18 stocks of the 30-stockblue-chip index finishing in the green while twelve ended in the red. The tech-heavy Nasdaq Composite finished in the red due to weak performance by large-cap tech stocks. The S&P 500 also closed in the red. The Health Care Select Sector SPDR (XLV) declined 2.9%. Notably, five out of eleven sectors of the benchmark index closed in the red while six finished in the green.
Healthcare Stocks Plummet
Health care sector suffered stiff losses of Wednesday after UnitedHealth Group Inc.'s UNH CEO David Wichmann expressed concerns over the proposed "Medicare for All" bill by several Democrat lawmakers and alarmed investors that the bill is a potential destabilizer of nation's health system.
Notably, on Apr 10, Democrat Sen. Bernie Sanders introduced a new "Medicare for All" bill. The proposed bill is designed to create a government-controlled system to provide health insurance to all citizens of the country.
As per David Wichmann the newly unveiled bill is destined to "surely jeopardize the relationship people have with their doctors, destabilize the nation's health system and limit the ability of clinicians to practice medicine at their best."
Consequently, shares of major healthcare management companies such as UnitedHealth Group, Athem Inc. ANTM and Cigna Corp. CI plunged 0.4%, 3.6% and 3.7%, respectively. UnitedHealth Group carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Strong First Quarter Earnings
Meanwhile, first-quarter 2019 earnings session continued its momentum with better-than-expected performance. Despite weak trading and investment banking performance, Morgan Stanley's MS first-quarter 2019 earnings and revenues topped Zacks Consensus Estimates. ( Read More )
PepsiCo Inc. PEP reported solid first-quarter 2019 results, wherein earnings and sales topped estimates. With this, the company reported sales beat in seven of the last nine quarters. Further, it recorded positive earnings surprise in 12 of the last 13 quarters. ( Read More )
Consequently, shares of Morgan Stanley and PepsiCo climbed 2.6% and 3.8%, respectively.
The Department of Commerce reported that U.S. trade deficit declined 3.4% in February to $49.4 billion from a revised figure of $51.1 billion in January. February's trade deficit was better-than the consensus estimate of $53.5 billion and marked the lowest level of trade deficit in eight months. Exports jumped 1.1% to a four-month high of $209.7 billion while imports rose marginally by 0.2% to $259.1 billion.
Stocks That Made Headline
Kinder Morgan Inc. KMI posted first-quarter 2019 adjusted earnings of 25 cents per share, in line with the Zacks Consensus Estimate and up almost 14% from the year-ago quarter's 22 cents. ( Read More )
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.