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Overnight Markets: health-care stocks drag Wall Street lower

Overnight Markets: health-care stocks drag Wall Street lower

Wall Street closed slightly lower on Wednesday as a string of positive corporate earnings and upbeat economic data from the US and China was overshadowed by a drop in healthcare shares.

The Dow Jones Industrial Average fell three points, or 0.01%, to 26,450, the S&P 500 lost seven points, or 0.23%, to 2,900 and the Nasdaq Composite dropped four points, or 0.05%, to 7,996.

On the economic front, the US trade deficit dropped to an eight-month low in February due to a 20.2% plunge in imports from China. Meanwhile, China’s first-quarter GDP grew at a better-than-expected 6.4% annual rate.

The healthcare sector saw its biggest percentage drop in four months, falling 2.9% on regulatory worries. UnitedHealth Group Inc, Pfizer Inc, Merck & Co Inc and Abbott Laboratories all closed down between 1.9% and 4.7%, and were among the biggest drags on the broader S&P 500.

The sector’s drop overshadowed generally encouraging earnings reports. Morgan Stanley surged 2.6% after beating analyst estimates due to cost-cutting and growth in its wealth management segment.

United Continental Holdings Inc jumped 4.7% following Tuesday’s after-market earnings report. Robust business jet demand drove Textron Inc’s earnings beat estimates, driving its stock up 4.0%.

PepsiCo Inc reported better-than-expected first-quarter sales on strong North American demand. The packaged food company’s shares rose 3.8%.

Of the 11 major sectors in the S&P 500, six ended the session in the black.

Qualcomm Inc surged 12.2% after the chipmaker settled its long-running legal battle with Apple Inc. Apple shares climbed 1.9%. The news boosted other chipmakers, with the Philadelphia SE Semiconductor index advancing 1.6%.

Shares of Netflix Inc. were down 1.3% following the release of its first-quarter earnings late Tuesday.

In Asia, shares traded mixed on Thursday in morning session as companies reported better-than-expected earnings stateside.

In Japan, the Nikkei 225 dipped fractionally in early trade, while the Topix index also traded slightly lower.

South Korea’s Kospi fell 0.15%. In Australia, however, the ASX 200 added 0.28%. China’s Shanghai Composite Index was down 0.20%, while Hong Kong’s Hang Seng Index was trading 0.50% lower.

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