Markets Right Now: Health care, banks lead US stocks lower


USA stocks fell after weak first-quarter reports from Johnson & Johnson and Goldman Sachs frustrated investors who hope that company earnings are on the rise. Over and above this, the British government made a surprise announcement of early election next month.

The Standard & Poor's 500 index fell 5 points, or 0.2%, to 2,343.

The Dow fell 113 points to end the day at 20,523 and the S&P lost six points to 2,342. Goldman Sachs accounted for half of that loss. The Nasdaq composite fell 10 points, or 0.2 percent, to 5,846. Johnson & Johnson also suffered the biggest blow of the year.

Stocks jumped Monday but they've been gradually drifting lower over the last few weeks.

HEALTH CARE WOES: Health care products giant Johnson & Johnson fell after investors were disappointed with its sales. Johnson & Johnson saw a loss 6% from its largest-selling drug, the Crohn's disease treatment Remicade.

The maker of Tylenol and Band-Aids lost $3.90, or 3.1 percent, to $121.82.

One bright spot was Dow component UnitedHealth UNH.N whose shares rose 1.3 percent to $169.25 after the health insurer reported better-than-expected quarterly results and raised its profit and revenue forecasts for the year. It will also pay $6.1 billion to buy a group of businesses from medical device maker Medtronic. Cardinal Health sank 9.44 dollars, or 11.5%, to 72.39 dollars.

BANKS STRUGGLE: Goldman Sachs had a rare miss in its first quarter results, as its typically best-in-class trading desks did not perform as well as its competitors.

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Declining issues outnumbered advancing ones on the NYSE by a 1.11-to-1 ratio; on Nasdaq, a 1.27-to-1 ratio favoured decliners.

The drop in bond yields also hurt banks, as lower bond yields mean reduced interest rates and smaller profits on lending. Theresa May's Conservatives are expected to do well, something she hopes will give her a stronger mandate to negotiate the Brexit deal with the European Union.

Meanwhile, building permits rose 3.6% to 1.26m units, compared with February when they fell 6%. Polls don't give a clear edge to any of the four leading candidates.

The Russell 2000 is 16.65 points, or 1.2 percent.

European markets show steep losses, with U.K.'s FTSE -2.1% following Prime Minister May's surprise call for a snap election for June 8, France's CAC -1.4% ahead of the presidential election, and Germany's DAX -0.9%; in Asia, Japan's Nikkei ended +0.3% while China's Shanghai Composite closed -0.8%. It also revised the terms of the sale of its credit card business.

The Dow Jones Industrial Average ended about 110 points lower with Goldman shaving off 73 points.

The 10-year Treasury yield continued to bleed. This led to investors running for safety, resulting in a rise in the bond prices while the indexes (both the United States and the European) tumbled.

ENERGY: Benchmark U.S. crude futures added 4 cents to $52.69 a barrel in NY.