Major US stock indices have predominantly increased, helped by a rise in prices for individual health sector stocks, as well as the technology segment and expectations of lower interest rates, which have intensified after the report of the Fed Chairman Jerome Powell.

Shares of medical insurers Cigna Corp (CI) and UnitedHealth Group Inc. (UNH) jumped 8.88% and 5.37%, respectively, while McKesson Corp. (MCK) rose 1.87% after the Trump administration abandoned plans to exclude drug discounts from its Medicare health insurance plans. However, the shares of drug manufacturers Merck & Co Inc. (MRK) and Pfizer (PFE) fell by 4.62% and 2.64%, respectively.

Powell’s “dovish” statements also supported the stock market, which again appeared in the US Congress with its semi-annual monetary policy report.

The inflation data for June was also in focus. The report of the Ministry of Labor showed that the consumer price index in June rose by 0.1%, which corresponds to a slight increase in May. Economists had expected consumer prices to remain unchanged. Excluding food and energy prices, basic consumer prices rose 0.3% in June, after rising 0.1% for four consecutive months. Monthly increase in base prices was the highest in 1.5 years. It was expected that core inflation will grow by 0.2%. In the 12 months to June, the base consumer price index rose 2.1% after rising 2.0% in May. The fact that core inflation showed a sharp rise in June did not have a strong effect on expectations of a Fed rate cut this month. According to the FedWatch CME Group tool, traders take into account in quotes the 100% probability of interest rate cuts at the end of July.

Most of the components of DOW recorded an increase (19 of 30). The growth leader was UnitedHealth Group Inc. (UNH; + 5.37%). Outsider were shares of Merck & Co Inc. (MRK; -4.62%).

Most sectors of the S & P finished trading in positive territory. The service sector grew the most (+ 0.2%). The largest decline was shown by the health sector (-0.4%).

At the time of closing:

Dow 27,088.08 +227.88 +0.85%

S & P 500 2,999.91 +6.84 +0.23%

Nasdaq 100 8,196.04 -6.49 -0.08%

U.S. stock-index futures rose slightly on Thursday, as inflation report revealed the U.S. underlying consumer prices increased by the most in nearly 1-1/2 years in June, dimming hopes for an aggressive interest cut by the Federal Reserve this month.

Global Stocks:

(company / ticker / price / change ($/%) / volume)

Home Depot (HD) initiated with a Buy at Goldman; target $235

Microsoft (MSFT) initiated with an Outperform at Cowen; target $150

Walmart (WMT) initiated with a Buy at Goldman; target $123

Alcoa (AA) downgraded to Hold from Buy at Deutsche Bank; target lowered to $23

Int'l Paper (IP) downgraded to Neutral from Buy at Citigroup

Freeport-McMoRan (FCX) upgraded to Buy from Hold at Deutsche Bank; target raised to $13.50

Delta Air Lines (DAL) reported Q2 FY 2019 earnings of $2.35 per share (versus $1.77 in Q2 FY 2018), beating analysts’ consensus of $2.28.

The company’s quarterly revenues amounted to $12.536 bln (+6.5% y/y), generally in line with analysts’ consensus estimate of $12.487 bln.

The company also issued in-line guidance for Q3 FY 2019, projecting EPS of $2.10-2.40 (versus analysts’ consensus estimate of $2.16) and revenue growth of 1.5-3.5%.

It also raised its FY 2019 EPS guidance to $6.75-7.25 from $6-7 (versus analysts’ consensus estimate of $6.98) and revenue growth guidance to 6-7% from 4-6%.

DAL rose to $60.70 (+2.07%) in pre-market trading.