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* Healthcare stocks have their worst day in four months
* Qualcomm surges on surprise settlement with Apple
* U.S. trade deficit drops, China's GDP better than expected
* Indexes down: Dow 0.01%, S&P 500 0.23%, Nasdaq 0.05% (Updates to market close)
By Stephen Culp
NEW YORK, April 17 (Reuters) - U.S. stocks ended slightlylower on Wednesday as a drop in healthcare shares overshadowed astring of positive corporate earnings and upbeat economic datafrom the United States and China.
All three major U.S. stock indexes ended the session innegative territory, with the S&P 500 remaining just within apercent below its record high reached in September.
The healthcare sector .SPXHC saw its biggest percentagedrop in four months, falling 2.9% on regulatory worries.
UnitedHealth Group IncUNH.N , Pfizer IncPFE.N , Merck &Co IncMRK.N and Abbott LaboratoriesABT.N all closed downbetween 1.9% and 4.7%, and were among the biggest drags on thebroader S&P 500.
"Companies are worried about the attention 'Medicare forall' is getting," said Jim Bell, president and chief investmentofficer at Bell Investment Advisors in Oakland, CA. "The way theCEOs of these companies are going on offense against thediscussions in Congress, it starts a momentum of its own."
"(Investors) would rather invest in sectors that aren'tgoing through such a big controversy."
The sector's drop dampened generally encouraging earningsreports.
Morgan StanleyMS.N rose 2.6% after beating analystestimates due to cost-cutting and growth in its wealthmanagement segment.
United Continental Holdings IncUAL.O jumped 4.7%following Tuesday's after-market earnings report, where theairline bested consensus estimates and held its 2019 profittarget firm, even as Boeing Co'sBA.N 737 MAX jets remaingrounded.
Robust business jet demand drove Textron Inc'sTXT.N earnings beat, driving its stock up 4.0%.
PepsiCo IncPEP.O reported better-than-expectedfirst-quarter sales on strong North American demand. Thepackaged food company's shares rose 3.8%.
With reporting season in high gear, analysts now expectJan-March S&P 500 profits to have dropped 1.8% year-on-year,according to Refinitiv data, which would mark the first earningsdecline since 2016.
Of the 54 S&P 500 companies that have posted thus far, 79.6%have beaten consensus, compared with the 65% average beat rategoing back to 1994.
The Dow Jones Industrial Average .DJI fell 3.12 points, or0.01%, to 26,449.54, the S&P 500 .SPX lost 6.61 points, or0.23%, to 2,900.45 and the Nasdaq Composite .IXIC dropped 4.15points, or 0.05%, to 7,996.08.
Of the 11 major sectors in the S&P 500, six ended thesession in the black.
Qualcomm IncQCOM.O surged 12.2% after the chipmakersettled its long-running legal battle with Apple IncAAPL.O .
The news boosted other chipmakers, with the Philadelphia SESemiconductor index .SOX advancing 1.6%.
On the economic front, the U.S. trade deficit USTBAL=ECI dropped to an eight-month low in February due to a 20.2% plungein imports from China.
China, meanwhile, saw its first-quarter GDP grow at abetter-than-expected 6.4% annual rate.
Declining issues outnumbered advancing ones on the NYSE by a1.39-to-1 ratio; on Nasdaq, a 1.74-to-1 ratio favored decliners.
The S&P 500 posted 47 new 52-week highs and 5 new lows; theNasdaq Composite recorded 68 new highs and 63 new lows.
Volume on U.S. exchanges was 7.07 billion shares, comparedto the 6.84 billion average over the last 20 trading days. (Reporting by Stephen CulpEditing by Nick Zieminski) ((email@example.com; 646-223-6076;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.