What's moving markets today: April 16, 2019
After the US market close Tuesday, United parent United Continental (UAL) reported better than expected first quarter earnings, and it reaffirmed earlier profit guidance for the full year. Shares rose nearly 3% immediately after the report.
Executives are set to hold their conference call with analysts and investors on Wednesday morning.
The company said it expects to have a total of 30 Max jets in its fleet by year's end. It is the first 737 Max customer among US airlines to report first quarter results.
United took delivery of four of those jets earlier this year, in addition to five it already head. Then Boeing grounded the planes on March 13 following the fatal crash of an Ethiopian Airlines 737 Max. It was the second fatal crash of the jet in less than five months, and investigators believe the problem could be an automatic safety feature that forced its nose down. Boeing is seeking a software fix to address the problem.
The sector-wide slump came after UnitedHealth CEO David Wichmann said "Medicare for All" policies, as proposed by some politicians and presumed candidates for the 2020 presidential election, would hurt the industry.
"The wholesale disruption of American health care being discussed in some of these proposals would surely jeopardize the relationship people have with their doctors, destabilize the nation's health system, and limit the ability of clinicians to practice medicine at their best," Wichmann said on his company's earnings call.
UnitedHealth's first quarter earnings beat Wall Street expectations. But those results still couldn't stave off Tuesday's losses. Like its peers, UnitedHealth (UNH) also fell — roughly 4%.
Stock markets ended Tuesday slightly higher, helped by a last minute rally from Qualcomm.
Health care stocks were among the biggest losers of the day. UnitedHealth (UNH), HCA Healthcare (HCA) and Cigna (CI) all finishing the day lower. HCA dropped the most — about 10%. Earlier in the day, UnitedHealth’s CEO told investors on an earnings call that the “Medicare for All” proposals being discussed by Congress could “destabilize the nation’s health system.”
Shares of Qualcomm (QCOM) jumped some 16% to its highest level since October in late Tuesday trading, after the chip maker and Apple (AAPL) said they had agreed to dismiss all litigation between one another.
The two tech giants reached a six-year license agreement, starting April 2019, with a two-year extension option. Apple is also due to pay Qualcomm an undisclosed amount.
Apple shares were up 0.3%
“The reason we are not seeing any rally in the gold price is mainly due to the strength in the US economic data," which in turn strengthens the greenback, wrote Naeem Aslam, chief market analyst at ThinkMarkets.
"This has two impacts: firstly, traders are more interested in pouring money in riskier assets. Finally, they do not believe that the Fed is going to maintain the same monetary policy stance which they currently hold.”
Gold futures hit their lowest level since January, settling at $1277 an ounce. Earlier in the trading session, futures dropped to their worst level since December. And that could mean that gold is headed even lower.
Nio (NIO), the troubled car company billed as China's answer to Tesla, has hit an all-time low, according to our Paul R. La Monica:
Here's the stock's decline since it went public in September 2018:
BlackRock (BLK) CEO Larry Fink thinks US stocks, which are notably close to record highs, are more likely to rally further than to turn lower — even though many market watchers are worried about the next bubble.
"Despite where the markets are in equities, we have not seen money being put to work," Fink said on CNBC this morning, adding he was still seeing outflows in stocks.
Just months ago, investors assumed that the Federal Reserve would raise interest rates further, which would have been great for fixed income securities but not so great for stocks. BlackRock itself recorded a record $32 billion inflow into its bond funds between January and March, according to its first quarter results.
But with the Fed taking its foot off the gas, the reverse should hold true, and stocks should get another boost as allocations catch up, according to Fink's reasoning.
Stocks held their modest gains halfway through Tuesday’s trading day.
Johnson & Johnson (JNJ), the best performing stock in the Dow today, is up 1.9% after beating expectations for its first quarter results.
The Dow's biggest loser? Shares of United Health Group (UNH), which also beat estimates and raised its 2019 forecast, are down 3.3%.
Insurance provider Progressive (PGR) led gainers in the S&P, climbing 6.6%, after reporting stronger-than-expected earnings.
The Nasdaq rose above 8,000 points for the first time in six months on Tuesday.
It was led higher by gains in technology and health care stocks.
At its high, the benchmark touched 8,018 points on Tuesday, its best level since October 2018. It hit its all-time intraday high of 8,133 in September.