US stocks dragged down by health care sector
U.S. stocks closed slightly lower Thursday after spending much of the day wavering between small gains and losses.
Several companies reported earnings and outlooks that offered a mixed picture of the economy for investors.
Health care stocks were among the biggest decliners, dragged down after UnitedHealth Group cut its full-year earnings forecast. The nation’s largest health insurer also raised doubts about whether it will continue to participate in a key piece of the Affordable Care Act.
Traders felt a bit better about payments company Square and online dating site operator Match Group. Both soared on their first day of trading.
In the absence of major economic news, investors honed in on the uneven company earnings and outlooks.
“That’s why we are largely without a lot of vigor in either direction today,” said Eric Wiegand, senior portfolio manager at U.S. Bank Wealth Management.
All told, the Dow Jones industrial average fell 4.41 points, or 0.02 percent, to 17,732.75. The Standard & Poor’s 500 index slipped 2.34 points, or 0.1 percent, to 2,081.24. The Nasdaq composite lost 1.56 points, or 0.03 percent, to 5,073.64.
Stocks got off to a plodding start early Thursday, spending much of the morning hovering close to the levels from a day earlier, when the S& P 500 index posted its biggest gain in four weeks.
The Labor Department’s latest weekly tally of unemployment benefit applications provided some good, if expected, insight into the job market.
Applications for unemployment aid dropped last week to a seasonally adjusted 271,000. The four-week average, a less volatile measure, increased 3,000 to 270,750.
Beyond that, investors focused on the latest string of company earnings.
Best Buy dropped 2.1 percent after releasing disappointing sales and a cautious outlook for the holiday shopping season. The stock slipped 66 cents to $30.67.
UnitedHealth Group fell 5.6 percent after it cut its 2015 earnings forecast and said it would pull back on the marketing of its exchange business a few weeks after open enrollment for that coverage began nationwide.
The insurer also said that it will decide in the first half of next year to what extent it can continue to serve the public health insurance exchange markets in 2017. The stock lost $6.62 to $110.63. Tenet Healthcare also slumped, sliding $2.65, or 8 percent, to $30.40.
Health care stocks fell the most among the 10 sectors in the S& P 500 index, sliding 1.6 percent. The sector remains up 3.4 percent for the year.
“UnitedHealth kind of sent shivers through the stock market a little bit,” said Chris Gaffney, president at EverBank World Markets.
Other companies turned in more encouraging results.
Single-serve coffee brewing systems maker Keurig Green Mountain and customer-management software developer Salesforce.com each rose sharply after reporting better-than-expected earnings and revenue. Keurig vaulted $7.38, or 18.2 percent, to $47.88. Salesforce.com climbed $3.29, or 4.3 percent, to $80.64.
Traders also bid up shares in J.M. Smucker, which delivered earnings that beat Wall Street’s expectations. The food products company jumped $7.90, or 7 percent, to $121.28.
Square and Match Group made a big splash in their market debut.
Square, known for its white, cube-shaped credit and debit card readers that plug into smartphones, gained $4.07, or 45.2 percent, to $13.07. Match, owner of online dating portals Tinder, Match.com and OKCupid, climbed $2.74, or 22.8 percent, to $14.74.
In Europe, Germany’s DAX gained 1 percent, while France’s CAC-40 rose 0.2 percent. Britain’s FTSE 100 climbed 0.8 percent. In Asia, China’s main stock index rose 1.4 percent, while Hong Kong’s Hang Seng gained 1.4 percent. Tokyo’s Nikkei 225 rose 1.1 percent, while South Korea’s Kospi gained 1.3 percent.
Benchmark U.S. crude fell 21 cents to $40.54 a barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, rose 4 cents to $44.18 a barrel in London.
Wholesale gasoline rose 2 cents to $1.288 a gallon, heating oil fell 1 cent to $1.372 a gallon and natural gas fell 7 cents to $2.276 per 1,000 cubic feet.
Precious and industrial metals prices were mixed. Gold rose $9.20 to $1,077.90 an ounce, silver gained 14 cents to $14.22 an ounce and copper was essentially flat at $2.08 a pound.
Bond prices rose. The yield on the 10-year Treasury note fell to 2.24 percent from 2.27 percent late Wednesday.
The euro rose to $1.0731 from $1.0647 while the dollar fell to 122.86 yen from 123.57 yen.