On Thursday, April 17, the S&P 500 saw modest gains, ticking up by 0.1% as it wrapped up a shortened trading week. The day was marked by a focus on earnings reports and comments from Federal Reserve Chairman Jerome Powell, particularly on how tariffs could affect the economy. Despite the minor positive movement in the broader index, major sectors experienced contrasting fortunes, with notable declines in healthcare stocks and significant gains in select companies.
Eli Lilly’s Breakthrough Sends Stock Soaring
The most striking performance came from Eli Lilly (LLY), whose shares surged 14.4% after the pharmaceutical giant announced promising results from a clinical trial for its experimental oral weight-loss drug, orforglipron. This Phase 3 trial revealed that the drug significantly outperformed a placebo in terms of weight loss and reducing A1C levels, a key marker for blood sugar management. Eli Lilly expressed confidence in seeking FDA approval for orforglipron next year as a treatment for type 2 diabetes. This news not only boosted the stock but also set a bullish tone for other health-related stocks in the market.
UnitedHealth’s Struggles Weigh on Healthcare Sector
On the flip side, the healthcare sector faced significant headwinds. UnitedHealth Group (UNH) reported disappointing earnings for the first quarter, missing both sales and profit estimates. The insurance giant also lowered its full-year profit guidance, citing rising medical costs as a major concern. This unexpected drop in performance caused UnitedHealth’s stock to plummet by 22.4%, marking the heaviest decline in both the Dow and S&P 500 for the day. The weak performance of UnitedHealth had a ripple effect on other health insurance stocks, with Humana (HUM) also losing 7.4% of its value.
Dollar Tree’s Resilience in a Tough Economy
Meanwhile, Dollar Tree (DLTR) saw a more positive trajectory, adding 8.1% to its stock price on Thursday. Analysts have suggested that the discount retailer could stand to benefit from the ongoing economic challenges, particularly in light of broader inflationary pressures. Citi analysts recently upgraded the stock, highlighting Dollar Tree’s ability to pass on price hikes without significantly affecting consumer demand. The company’s track record during previous economic downturns further suggests that it could remain strong even as the macroeconomic environment presents ongoing challenges.
Oil Prices Climb Amid Iran Sanctions, Boosting Energy Stocks
Crude oil prices also made headlines, advancing for the second consecutive day as the U.S. imposed additional sanctions on Iran’s oil sector. The uptick in oil prices provided a boost to energy stocks, with companies like Diamondback Energy (FANG) and Halliburton (HAL) seeing significant gains of 5.7% and 5.1%, respectively. These increases reflect continued strength in the energy sector, which has benefitted from the geopolitical tensions affecting oil supply chains globally.
Global Payments and Worldpay: A Deal with Mixed Reactions
In the world of financial technology, Global Payments (GPN) made headlines by announcing a deal to acquire rival payment processing company Worldpay from Fidelity National Information Services (FIS) and private equity firm GTCR. While the merger is expected to create a powerhouse in the payment processing industry, the market responded with caution. Shares of Global Payments tumbled 17.4%, reflecting investor skepticism about the long-term benefits of the acquisition. In contrast, shares of FIS, which is set to retain a stake in the merged company, rose by 8.7%, suggesting that the market views its involvement in the deal more favorably.
Snap-On Faces Headwinds from Economic Uncertainty
Snap-On (SNA), the maker of professional tools and equipment, also faced a tough day on the market. The company’s stock fell 8.0% after it reported lower-than-expected sales and profits. Snap-On cited the broader economic uncertainty as a key factor in its performance, noting that customers were increasingly reluctant to purchase financed goods due to the unpredictable macroeconomic environment.
Conclusion: A Volatile Week Ahead of a Holiday
As the week came to a close, U.S. markets were set to pause for Good Friday, leaving investors to reflect on the mixed performances across sectors. The S&P 500’s slight gain contrasted with the larger losses seen in certain sectors like healthcare and financial technology. While some companies, such as Eli Lilly and Dollar Tree, showcased strong earnings and promising outlooks, others, like UnitedHealth and Snap-On, faced significant headwinds. As the market braces for a new week, all eyes will be on how upcoming earnings reports and external factors like geopolitical tensions continue to shape the broader economic landscape.
In this environment of uncertainty, investors are likely to remain cautious, with earnings misses, sector-specific struggles, and broader economic challenges continuing to influence market behavior. How these trends evolve in the coming weeks will be crucial for determining the direction of U.S. equities and investor sentiment overall.
