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Stocks hit their session highs out of the gate Tuesday but trended lower from there amid conflicting headlines over the war in Iran. Market participants also sifted through a stack of corporate earnings reports, which included a beat-and-raise quarter for UnitedHealth Group (UNH).
Shortly after President Donald Trump took to Truth Social this morning to post that “Iran has Violated the Cease Fire numerous times!,” he told CNBC that he thinks the U.S. will “end up with a great deal” with Tehran.
This comes ahead of tomorrow’s end to a ceasefire between the U.S. and Iran, which Trump said he’d prefer not to extend. Peace talks between the two nations are currently on hold, according to The New York Times.
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While front-month West Texas Intermediate crude futures shot up nearly 3% to settle at $92.13 per barrel, the main indexes all finished lower. At the close, the blue-chip Dow Jones Industrial Average was down 0.6% at 49,149, the broader S&P 500 was off 0.6% at 7,064, and the tech-heavy Nasdaq Composite had shed 0.6% to 24,259.
UNH stock soars on beat-and-raise quarter
UnitedHealth was the best Dow Jones stock today, surging 7.0% after the health insurance giant reported earnings.
For the three months ended March 31, UNH said earnings were up 0.4% year over year to $7.23 per share, while revenue rose 2% to $111.7 billion — better than analysts expected.
The company’s medical benefit ratio, which measures total medical expenses paid to premiums collected, fell to 83.9% from 84.8% the year prior, indicating UNH took in more premiums than it paid out in expenses.
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UnitedHealth also raised its full-year earnings per share outlook to $18.25 from its prior forecast of $17.75.
At the other end of the Dow was 3M (MMM), which fell 2.0% after the Post-it maker forecast full-year earnings that are below Wall Street estimates at the midpoint. Still, MMM’s first-quarter earnings and revenue came in better than expected.
Apple drops as Tim Cook steps down
Apple (AAPL) was another Dow stock that closed lower on Tuesday, falling 2.5% on news Tim Cook is stepping down as CEO.
Cook has served in the role for nearly 15 years and the blue chip stock has averaged an annual total return (price change plus dividends) of 24.5% in that time. The S&P 500, for context, has generated an average annual return of 14.9% over the past 15 years.
Beginning September 1, Tim Cook will become executive chair at Apple, while John Ternus, who is currently AAPL’s senior vice president of Hardware Engineering, will become CEO.
“Apple is making a major transition on its AI strategy and longtime CEO and legendary Cook leaving now is a surprise,” says Wedbush analyst Dan Ives, who has an Outperform (Buy) rating on the tech stock. “While there were rumors of Cook leaving as CEO, investors will for now have more questions than answers around the timing and what this means for the broader Apple strategy.”
Intel can soar another 43%, says HSBC
HSBC analyst Frank Lee upgraded Intel (INTC, +0.9%) to Buy from Hold on Tuesday and lifted his price target to $95 from $50, representing implied upside of 43.4% to current levels.
The high-flying chip stock is up 250% in the past 12 months on several foundry deals, but Lee thinks demand for Intel’s CPU servers will create a “near-term catalyst” for the shares.
Intel makes an appearance on this week’s earnings calendar, with its first-quarter results due out after Thursday’s close.
Fed chair nominee Kevin Warsh concludes confirmation hearing, next steps in limbo
Wall Street also tracked this morning’s confirmation hearing for Federal Reserve chair nominee Kevin Warsh.
The former Fed governor insisted that central bank independence was of the utmost importance to him and that President Trump had not directed him to lower interest rates.
To be confirmed as the new Fed chair by the time Jerome Powell’s term is up on May 15, a majority committee must approve Warsh for a full Senate vote. However, Sen. Thom Tillis (R-North Carolina) has vowed to block the vote — a stance he reiterated today — as long as the Department of Justice’s probe into Jerome Powell continues.
If Tillis refuses to advance Warsh, the vote will be split 12-12 among the 13 Republicans and 11 Democrats on the Senate Banking Committee, meaning his nomination for Fed chair will fail to move forward.