New York: US stocks finished little changed on Wednesday as disappointing outlooks from healthcare companies offset strong earnings from Morgan Stanley and Apple Inc.
Healthcare stocks took a beating after both Abbott Laboratories and Gilead Sciences Inc cut profit forecasts. Both Abbott and Gilead cited the impact of costs from US healthcare reform in their outlooks.
The two represented a setback in an otherwise upbeat earnings season so far.
“We still have a lot more news on how healthcare stocks are going to be affected. Slowly people will figure out winners and losers as the law gets implemented,” said Giri Cherukuri, head trader at OakBrook Investments Lisle, Illinois. “With all the good earnings we’ve had lately, you’re getting a bit of profit-taking.”
After the closing bell, investors received more disappointing outlooks that may pressure the market on Thursday. Chipmaker Qualcomm Inc gave a weak forecast for the current quarter and full year, sending its stock down 6% to $39.95 in after-hours trading.
EBay Inc, an Internet auctioneer and retailer, also gave a forecast that fell short of Wall Street expectations, sparking a drop of 6.4% to $24.64 in its stock after the bell.
During the regular session, the S&P 500 crisscrossed the key support level of 1,200, which if lost may unleash more downward pressure after the benchmark index breached a key uptrend line from early February late last week. The broad index is still up 78% from the March 2009 bottom.
Shares of Gilead tumbled nearly 10% to $40.76, a day after reporting results. Abbott lost 2.4% to $51.78.
The Dow Jones industrial average edged up 7.86 points, or 0.07%, at 11,124.92. The Standard & Poor’s 500 Index dipped 1.23 points, or 0.10%, to 1,205.94. The Nasdaq Composite Index inched up 4.30 points, or 0.17%, to 2,504.61.
Among gainers, Morgan Stanley shares climbed 4.04% to $31.68 after posting a stronger-than-expected profit on strong fixed income trading. The KBW Banks index edged up 0.9%.
Regional banks reporting on Wednesday included KeyCorp, which jumped 4.2% to $8.94 after the Midwestern bank posted a smaller-than-expected first-quarter loss. The S&P regional banks index gained 1.7%.
Apple shares advanced 6% to $259.22 -- a lifetime closing high, helping the Nasdaq end the session in positive territory a day after Apple posted quarterly results that eclipsed forecasts on record iPhone sales and forecast strong revenue growth.
During the session Apple hit an all-time intraday high of $260.25.
But drugmaker Merck & Co fell 3.6% to $34.74 and was the Dow’s biggest drag, while Bristol Myers dropped 1.3% to $25.10. The NYSE Arca Pharmaceutical index declined 1.3% and the S&P healthcare index fell 1.8%.
Worries about Greece’s debt woes lingered, with Greek borrowing costs surging to a 12-year high on Tuesday. Talks on a potential aid deal with the EU and IMF began on Wednesday.
Financial stocks may claim the spotlight on Thursday as US President Barack Obama is scheduled to visit New York and expected to urge Wall Street to get behind financial regulatory reform.
About 10.01 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, above last year’s estimated daily average of 9.65 billion.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of 4 to 3, while on the Nasdaq, about nine stocks rose for every eight that fell.