Oct 20 (Reuters) - The Dow led Wall Street higher on Tuesday as investors focused on value stocks such as healthcare, while technology lagged after rebounding a day earlier.
Healthcare (.SPXHC), led gains among the S&P 500's 11 major sector indexes, hitting a record high on Tuesday. Eli Lilly (LLY.N), boosted the benchmark index along with Dow components UnitedHealth (UNH.N), Merck & Co (MRK.N), Johnson & Johnson (JNJ.N), and Amgen (AMGN.O). Vaccine company Moderna (MRNA.O), hit its highest level since 2022.
Defensive sectors such as real estate (.SPLRCR), and utilities (.SPLRCU), were also outperforming, along with the small-cap Russell 2000 index (.RUT).
Declines in megacap stocks pulled the communication services (.SPLRCL), sector down while energy (.SPNY), shares underperformed as oil prices dipped after touching a five-month high. Oil traders were weighing a meeting between the Iranian president and Pakistan's army chief, a key US-Iran mediator, against Houthi attacks on Saudi infrastructure and reports of vessel attacks in the Gulf.
TECH STOCKS TAKE A BREATHER
Trading was muted in the heavyweight technology sector, which had rebounded on Monday from a selloff last week. Technology investors have been worried about steep spending and financing costs for AI developments.
"Equity investors are still a little skeptical around the AI trade and the ability for some of these companies to monetize their investments, so you're seeing a bit of a rotation into other areas of the market," said Jim Baird, chief investment officer at Plante Moran Financial Advisors, pointing to advances on Tuesday in small caps and sectors including healthcare.
"Investors are looking for other opportunities outside of tech, and healthcare is one of the beneficiaries of that," he said.
According to preliminary data, the S&P 500 (.SPX), gained 23.79 points, or 0.31%, to end at 7,714.52 points, while the Nasdaq Composite (.IXIC), lost 9.05 points, or 0.03%, to 26,421.84. The Dow Jones Industrial Average (.DJI), rose 547.95 points, or 1.05%, to 52,513.98.
The S&P 500 value index (.IVX), was outperforming its growth counterpart (.IGX), on the day.
Investors were looking ahead to earnings reports from SpaceX (SPCX.O), and Netflix (NFLX.O), due after the market close. Meta and Tesla (TSLA.O), are scheduled to report on Wednesday.
Meta (META.O), and Netflix shares were among the weakest stocks in communication services on Tuesday, along with Alphabet (GOOGL.O).
General Motors (GM.N), shares dropped after the automaker signaled pressure in coming months from higher commodity costs and lower truck sales.
3M (MMM.N), rose after the company said it was expanding its data-center partnership with Amazon (AMZN.O), and issued a warrant to an Amazon subsidiary to purchase 3M common stock worth over $521 million. The industrial conglomerate also raised its full-year profit forecast.
Credit reporting firm Equifax (EFX.N), rallied after it reported third-quarter profit above analysts' estimates. Shares in Hasbro (HAS.O), also jumped after the toymaker raised its full-year forecast for both overall revenue and its digital gaming business.
Reporting by Sinéad Carew in New York, Tharuniyaa Lakshmi and Ragini Mathur in Bengaluru; Editing by Shilpi Majumdar and Rod Nickel
