Stocks edged higher on Wall Street, erasing the market’s modest losses from a day earlier and more in Tuesday’s Stock Market Update.
Banks and technology companies rose the most, while health care stocks closed broadly lower.
Citigroup rose 2.9% and JPMorgan Chase climbed 1.1%, but UnitedHealth Group sank 4%.
Chipmaker Qualcomm soared 23% in heavy trading after announcing that it had settled its longstanding legal dispute with Apple.
Health care stocks lagged the most as traders weighed quarterly earnings from Johnson & Johnson and UnitedHealth Group. The results from both companies topped Wall Street forecasts.
Investors are looking to the latest wave of corporate earnings reports for clues on the health of the global economy and the prospects for company profits this year. Netflix, railroad operator CSX and International Business Machines were scheduled to report quarterly results after the close of regular trading Tuesday.
Banks kicked off the latest quarterly reporting season last week with mixed results. Analysts expect the first-quarter results for S&P 500 companies overall to be the weakest in nearly three years.
STOCK MARKET UPDATE
KEEPING SCORE: The S&P 500 index edged up 1 point, or 0.1%, to 2,907. The Dow Jones Industrial Average added 67 points, or 0.3%, to 26,452. The Nasdaq rose 24 points, or 0.3%, to 8,000.
Bond prices fell. The yield on the 10-year Treasury rose to 2.59%.
ALL ABOUT EARNINGS: Investors will be poring over corporate earnings reports over the next few weeks. Analysts expect companies in the S&P 500 to report a 2.9% drop in earnings per share from a year earlier, which would be the first decline since the spring of 2016. The expected decline is due almost entirely to weaker profit margins.
“The markets are prepared for this year-over-year decline that everyone is expecting in earnings,” said Erik Davidson, chief investment officer at Wells Fargo Private Bank. “Unless we have some significant misses, we should be doing OK.”
THAT’S SETTLED: Qualcomm shares surged following news that the semiconductor maker and Apple have settled their bitter patent dispute. A federal trial was set to begin later this month to determine whether Apple should be required to pay Qualcomm for licensing technology used in iPhones.
Last month, a federal court jury in San Diego ruled that Apple should pay $31 million in damages to Qualcomm for infringing on patents for technology owned by the chipmaker.
BEATING FORECASTS: Johnson & Johnson rose 1.3% after the health care products company’s first-quarter results topped Wall Street’s forecasts, even after the company said its profit slumped 14% following a decline in sales overseas and higher costs for research and litigation.
CLEAN BILL OF HEALTH: UnitedHealth Group, the nation’s largest health insurance company, reported first-quarter results that exceeded analysts’ expectations and raised its estimates for the full year. But cautious comments from management during a conference call with analysts weighed on the stock, which slumped 4%, giving up an early gain.
MIXED RESULTS: Bank of America was little changed after the nation’s second-largest bank reported strong earnings growth, but gave a weak forecast for net interest income, a key performance metric for banks.
OFF TRACK: JB Hunt Transport Services fell 5% after the trucking and logistics company’s first quarter profit and revenue fell short of Wall Street forecasts.
IN A BETTING MOOD: Scientific Games climbed 8.7% on news that the maker of betting machines and technology is partnering with Wynn Resorts to help develop digital sports betting and gambling. Wynn added 2.1%.
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