Market Wrap: Stocks Slip; Health Care Sinks, Intel Climbs
By Noel Randewich
NEW YORK -- Wall Street ended a little lower Thursday as falling health care stocks offset gains in Intel and other technology names while investors eyed an expected rate hike in December.
A profit warning by UnitedHealth (UNH) led to a 5.7 percent drop in its stock, making the health insurer the biggest drag on the Dow Jones industrial average and the S&P 500. It also sent the shares of competitors Anthem (ANTM) and Aetna (AET) down more than 6 percent each.
The S&P health care sector was the worst performer among the 10 major S&P sectors with a 1.63 percent decline.
%VIRTUAL-pullquote-We think the Fed will raise rates in December, but it will be more important how they set expectations about subsequent rate increases.%Adding to the pain in health care, Pfizer (PFE) fell 3.1 percent after reports that its talks to buy Allergan and redomicile in Ireland were in final stages. Allergan (AGN) lost 2.8 percent.
Intel (INTC) jumped 3.4 percent after boosting its annual dividend. The chipmaker and Apple (AAPL), up 1.3 percent, added more upward pressure to the S&P 500 than any other stocks.
Mobile payments company Square (SQ) soared 45 percent in its highly anticipated market debut, while dating website operator Match Group (MTCH) popped 23 percent on their first trading day.
Data released Thursday appeared to support the Federal Reserve's view of a strengthening labor market ahead of its meeting next month. The number of Americans filing for unemployment benefits fell last week.
Minutes from the Fed's October meeting, released Wednesday, hardened expectations of a December interest rate hike and hinted at a cautious approach after that.
Investors are increasingly pondering the pace of more rate increases in 2016, said David Carter, chief investment officer at Lenox Wealth Advisors in New York.
"We think the Fed will raise rates in December, but it will be more important how they set expectations about subsequent rate increases," Carter said. "If the Fed sets an expectation that subsequent rate increases will be modest and measured, we think the equity markets can rally for some time."
The Dow Jones industrial average (^DJI) closed 0.02 percent weaker at 17,732.75 points while the Standard & Poor's 500 index (^GSPC) lost 0.1 percent to 2,081.24. The Nasdaq composite (^IXIC) edged 0.03 percent lower to 5,073.64.
Seven of the 10 S&P sectors ended higher, led by utilities, up 1 percent.
Winners and Losers
After the bell, Nike (NKE) jumped 3.5 percent after it increased its dividend and announced a two-for-one share split.
Gap (GPS) posted quarterly results that sent its shares down 4 percent.
Tax software company Intuit (INTU) posted fiscal first-quarter results that pleased investors, pushing its stock 10 percent higher.
During Thursday's trading session, Salesforce (CRM) jumped 4.3 percent after its quarterly adjusted profit beat estimates and the online sales software maker raised its full-year revenue forecast.
NYSE advancing issues outnumbered decliners 1,585 to 1,478. On Nasdaq, 1,553 issues fell and 1,250 advanced. The S&P 500 showed 24 new 52-week highs and six lows, while the Nasdaq recorded 66 new highs and 109 lows.
About 6.5 billion shares changed hands on U.S. exchanges, below the 7.3 billion daily average for the past 20 trading days, according to Thomson Reuters data. (Additional reporting by Abhiram Nandakumar
Earnings Season
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