Here Are 3 Hot Things to Know About Stocks Right Now

  • The Dow Jones Industrial Average finished slightly down after IBM (IBM - Get Report)  posted lighter-than-expected first-quarter revenue and mixed guidance, while UnitedHealth Group (UNH - Get Report)  tumbled for a second day on concerns regarding the debate over Medicare-for-All proposals.
  • Qualcomm (QCOM - Get Report) surged after settling its long-running dispute with Apple (AAPL - Get Report) .
  • Intel (INTC - Get Report)  climbed after announcing it was dropping out of the 5G modem business.

Wall Street Overview

Stocks finished down Wednesday after IBM's  ( IBM - Get Report)  earnings report disappointed Wall Street and as UnitedHealth Group ( UNH - Get Report)  fell for a second day on concerns regarding the debate over Medicare-for-All proposals and their potential impact on managed-care companies.
 
The Dow Jones Industrial Average fell 3.12 points, or 0.01%, to 26,435, the S&P 500 -- which has closed higher in 12 of the past 13 trading sessions -- dropped 0.23% and the Nasdaq fell 0.05%.
 
Qualcomm ( QCOM - Get Report) surged 12.3% to $79.08 after the company said it ended its long-running dispute with Apple ( AAPL - Get Report) over royalty payments for the chipmaker's smartphone equipment. The settlement ends all litigation between the two companies and includes an unspecified payment from Apple to Qualcomm. Shares of Apple rose 2% to $203.13.
  
IBM reported  lighter-than-expected first-quarter revenue and mixed guidance. The stock fell 4.2% to $139.11. UnitedHealth declined 1.9% to $216.84, due to concerns about the Medicare-for-All proposals advocated by Vermont Senator and Democratic presidential candidate Bernie Sanders, who is running for president. Prescription drug prices have been the subject of Senate hearings.
 
"There is a growing perception that the popularity of universal healthcare is growing among the electorate, forcing investors to take notice as the odds of meaningful regulation increase," said Alec Young, managing director of global markets research, FTSE Russell. "Even though the likelihood of a major healthcare overhaul remains relatively low, enough uncertainty exists that investors are now selling first and asking questions later."

Ironically, Young added, the healthcare sector is expected to deliver 5 1/2% earnings growth in 2019, well ahead of the 3.2% expected for the Russell 1000 large-cap index.

Intel ( INTC - Get Report) climbed 3.3% to $58.56 after announcing it was dropping out of the 5G modem business just hours after the Apple-Qualcomm settlement. As part of their settlement, Apple and Qualcomm reached agreement on a multiyear licensing deal and a multiyear chipset supply agreement which likely will see Qualcomm modems return to Apple iPhones. During the dispute, Intel has been supplying Apple.
 
Morgan Stanley ( MS - Get Report)  advanced 2.6% to $48.26 after the company said first-quarter profit fell 9% from a year ago. Net income declined to $2.43 billion, or $1.39 a share. Excluding an unexpected tax benefit of 6 cents a share, the firm earned $1.33 a share, beating the average analyst estimate of $1.17.
 

Netflix  (NFLX - Get Report)  said it added 9.6 million paid streaming subscribers in the first quarter, beating guidance of 8.9 million, but its outlook for the second quarter disappointed and the stock fell 1.3% to $354.74 on Wednesday.

Shares of Sprint  (S - Get Report) and T-Mobile US (TMUS - Get Report) fell after a report suggested the Justice Department won't approve their merger as currently structured. Justice Department officials are balking at approving the $26.5 billion acquisition of Sprint by T-Mobile over antitrust concerns, The Wall Street Journal reported, citing unnamed sources. Sprint was down 6.2% to $5.64, while T-Mobile fell 2.2% to $72.46.

Shares of United Continental Holdings (UAL - Get Report) gained 4.8% to $89.24 after the parent company of United Airlines reported first-quarter earnings that surpassed analysts' forecasts and reiterated its full-year guidance. 

Shares of railroad transportation company CSX (CSX - Get Report) rose 4% to $78.94 after the company reported strong first-quarter earnings, thanks to increases in freight delivery traffic and declining costs.

Shares of Abbott Laboratories (ABT - Get Report) were down 4.6% to $72.88 even though the drug company and medical device maker reported first-quarter earnings that topped its own forecast, and analysts' estimates.

In economic news,  the U.S. and China tentatively scheduled additional face-to-face meetings in an effort to have a signing ceremony in late May or early June, the Wall Street Journal reported.

The U.S. trade deficit fell for the second straight month in February, dropping 3.4% to $49.4 billion, the lowest since June. Exports climbed 1.1% to $209.7 billion. Imports rose 0.2% to $259.1 billion. The goods deficit with China dropped 28.2% to $24.8 billion. Exports to China rose 18.2% to $8.4 billion. Imports from China fell 20.2% to $33.2 billion.

"President Trump will be happy with the update," said David Madden, a market analyst at CMC Markets U.K. "The reduction in the trade gap was partially down to a surge in aircraft sales, and in light the Boeing disaster, the number might look different next month." 

Abbott, Apple, Qualcomm, and UnitedHealth Group are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells the stocks? Learn more now.