US stocks ended slightly lower on Wednesday as a drop in healthcare shares overshadowed a string of positive corporate earnings and upbeat economic data from the US and China. All three major US stock indexes ended the session in negative territory, with the S&P 500 remaining just within a percent below its record high reached in September.

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

Morgan Stanley rose 2.6 per cent after beating analyst estimates due to cost-cutting and growth in its wealth management segment. United Continental Holdings jumped 4.7 per cent following Tuesday’s after-market earnings report, where the airline bested consensus estimates and held its 2019 profit target firm, even as Boeing Co’s 737 MAX jets remain grounded. Robust business jet demand drove Textron’s earnings beat, driving its stock up 4.0 per cent. PepsiCo reported better-than-expected first-quarter sales on strong North American demand. The packaged food company’s shares rose 3.8 per cent.

With reporting season in high gear, analysts now expect Jan-March S&P 500 profits to have dropped 1.8 per cent year-on-year, according to Refinitiv data, which would mark the first earnings decline since 2016. Of the 54 S&P 500 companies that have posted thus far, 79.6 per cent have beaten consensus, compared with the 65 per cent average beat rate going back to 1994.

The Dow Jones Industrial Average fell 3.12 points, or 0.01 per cent, to 26,449.54, the S&P 500 lost 6.61 points, or 0.23 per cent, to 2,900.45 and the Nasdaq Composite dropped 4.15 points, or 0.05 per cent, to 7,996.08.

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