US stock traded in a tight range on Thursday, as losses in the healthcare sector were offset by a rise in industrial shares, with big US banks notching gains ahead of earnings.
JPMorgan Chase & Co and Wells Fargo & Co will kick off what is expected to be a tough quarterly earnings season for banks on Friday.
Earnings of S&P 500 banks are expected to grow 1.8% in the first quarter, well below an 8.2% rise estimated six months ago, according to Refinitiv data.
The steep drop in the estimate comes in the wake of the Federal Reserve's plan to suspend interest rate hikes this year and a drop in 10-year Treasury yields.
The S&P financial index rose 0.44%, while the banking sector was up 0.37%.
Still, analysts say the contraction in earnings has been priced in by investors and may not cause a sharp pull back.
"It is kind of amazing the way the bull market has been running and, even with the choppy earnings season, I should still think it's not really going to affect the markets that much," Whitford Asset Management Chief Executive Officer Dom Catrambone said.
The S&P 500 is hovering near its six-month high and is less than 2% away from its record high touched in late September.
Concerns about trade and global economic growth have pushed central banks to take a dovish stance, broadly supporting investor appetite for risky assets.
Minutes from the Federal Reserve's March meeting on Wednesday showed that it was likely to leave interest rates unchanged this year given risks to the US economy from the slowdown and uncertainty over trade policies and financial conditions.
The European Central Bank also maintained its loose policy stance, raising the prospect of more support being pumped into the struggling euro zone economy.
Investors shrugged off inflation data, after a Labor Department report showed US producer prices increased by the most in five months in March, but underlying producer prices remained soft.
At 13:15 p.m. ET the Dow Jones Industrial Average was down 37.74 points, or 0.14%, at 26,119.42, the S&P 500 was down 1.02 points, or 0.04%, at 2,887.19 and the Nasdaq Composite was down 7.29 points, or 0.09%, at 7,956.96.
The S&P healthcare sector fell 1.2%, driven by a 4% drop in UnitedHealth Group Inc. The Nasdaq Biotech index fell 1.5%.
Industrial stocks got a boost from gains in defense companies Boeing Co and Lockheed Martin Corp.
Fastenal Co rose 4.5%, the most on the S&P 500, after the industrial supplier reported first-quarter profit that beat estimates.
Concho Resources Inc fell 4.7% after brokerage BMO cut its price target on the oil and gas producer.
Tesla Inc shares dropped 3.1% after the electric carmaker and Panasonic Corp said they were holding off on further investment in Tesla's Nevada Gigafactory.
Advancing issues outnumbered decliners by a 1.08-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.03-to-1 ratio on the Nasdaq.
The S&P index recorded 28 new 52-week highs and three new lows, while the Nasdaq recorded 57 new highs and 23 new lows.
First Published: IST