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The Key Takeaways
- The S&P 500 slid 0.2% on Thursday, Jan. 16, 2025, losing momentum after posting solid gains driven by earnings and inflation optimism in the previous session.
- UnitedHealth shares dropped as slumping revenue and increasing medical costs weighed on the health insurer's quarterly results.
- Dexcom’s shares increased after analysts pointed out positive factors.
On Thursday, major U.S. stock indexes slipped lower. This comes a week after a solid rally was driven by soft inflation figures and the start of earnings season.
The S&P 500 slipped 0.2%, ending a streak of three straight positive trading sessions. Dow also fell by 0.2% and the Nasdaq Composite dropped 0.9%.
UnitedHealth Group (UNH) shares dropped 6.0%, posting the heaviest daily loss in the S&P 500, following the healthcare giant’s first earnings release since last month’s fatal shooting of insurance unit chief Brian Thompson. UnitedHealth’s quarterly profit was higher than expected, but revenue came in lower than anticipated. The firm’s ratio of medical costs to revenue, which compares total revenue to medical costs, also increased year over year due to an increase in medical expenditures.
US Bancorp shares fell 5.6%. This move came as a result of mixed quarter results from the financial services provider. It topped adjusted profit forecasts but fell short on net interest margins, an important measure of how effective a lender is in lending capital.
Texas Instruments shares (TXN), which are a component of the NASDAQ, fell by 5.1% on reports China’s Commerce Ministry has launched an investigation to determine whether U.S. chipmaker subsidies pose a competitive challenge for Chinese goods. Texas Instruments, which focuses on low-end semiconductors such as power and analog chip sets, could be subject to repercussions from Chinese officials if they determine that the company violated antidumping regulations.
Shares of Dexcom (DXCM), a manufacturer of glucose-monitoring devices for patients with diabetes, gained the most of any S&P 500 stock on Thursday, jumping 5.5%. Piper Sandler analysts highlighted several positive catalysts that Dexcom has, such as a stable outlook in the durable medical equipment channel (DME), and approval for reimbursement of 5 million type 2 diabetics who don’t use insulin. Baird analysts also increased their target price for Dexcom, citing improvements in the sales force productivity as well as growth potential on U.S. market.
JPMorgan raised its price target for Estee Lauder’s (EL) shares, which led to a 4.8% jump in the stock of this makeup and skincare specialist. Analysts expect that this earnings season will be significant for manufacturers of personal and household care products. Discussions about consumer behavior, tariff risk, currency impact, and interest rate expectations are likely to have a profound effect on the industry outlook in 2025.
Taiwan Semiconductor Manufacturing Co., (TSM) issued strong profit guidance for the fourth quarter. While the Netherlands has tightened the export laws that might affect the chip industry, Taiwan Semiconductor Manufacturing Co. (TSM), the largest contract chipmaker in the world, highlighted an optimistic outlook for Artificial Intelligence (AI) which bodes very well for the sales of equipment for chip manufacturing. Shares of Applied Materials, KLA Corp., and Lam Research all gained 4,5%, 4,3% and 4.0% respectively.
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