Dow rises on UnitedHealth boost; Middle East tensions cap gains

Dow Jones Industrial Average stood out on Tuesday among its counterparts, buoyed by positive results from health insurer UnitedHealth. However, concerns over higher Treasury yields and escalating tensions in the Middle East restrained investor enthusiasm.

UnitedHealth Group advanced 5.9 per cent after exceeding expectations for first-quarter adjusted profit. Other health insurers, including Humana, CVS Health, and Centene, also experienced gains ranging from 0.3 per cent to 1.2 per cent.

Morgan Stanley added 2.4 per cent after surpassing first-quarter profit estimates, driven by a resurgence in investment banking.

According to Rick Meckler, a partner at Cherry Lane Investments, the market was not only reacting positively to the morning's earnings reports but also seeking stability following recent sell-offs. He noted a shift from broader market rallies to more selective stock picking based on individual results.

However, gains were tempered by Israel's ongoing discussions regarding a response to Iran's direct attack and concerns over rising bond yields. The yield on the 10-year government bond hit fresh five-month highs, indicating market unease. Additionally, data showing a surge in US retail sales in March raised questions about the Federal Reserve's stance on policy easing, with investors awaiting comments from policymakers, including Fed Chair Jerome Powell.

Rate-sensitive sectors such as real estate and utilities led declines, each down around 1 per cent.

As of 9:48 am US time, the Dow Jones Industrial Average was up 87.56 points, the S&P 500 was down 13.26 points, and the Nasdaq Composite was down 47.18 points.

Tesla fell 3.7 per cent following a 5 per cent drop in the previous session due to reports of layoffs, while Johnson & Johnson slipped 2.0 per cent after missing analysts' revenue estimates for the first quarter.

Declining issues outnumbered advancers on both the NYSE and Nasdaq, with the S&P index recording no new 52-week highs and the Nasdaq recording nine new highs and 189 new lows.

(With Reuters inputs)