Healthcare Sector ETFs Pop on Earnings Support

Healthcare sector ETFs were in good shape Tuesday after UnitedHealth Group (NYSE: UNH) and Johnson & Johnson (NYSE: JNJ) revealed strong third quarter results.

The Health Care Select Sector SPDR (NYSEArca: XLV), the largest healthcare exchange traded fund, gained 1.2% Tuesday while the broader S&P 500 Index dipped 0.1%.

“At the end of the day, earnings are going to continue to lead the market,” Mark Freeman, chief investment officer and portfolio manager at Westwood Holdings Group, told the Wall Street Journal.

Supporting the healthcare segment Tuesday, UnitedHealth Group shares surged 6.1% and Johnson & Johnson shares jumped 3.0%.

UnitedHealth strengthened after the large health insurer revealed an increase in profit and raised its guidance. Despite weakness in revenue caused by the company’s decision to pull out of most Affordable Care Act markets, the insurer is on steady footing.

President Donald Trump recently signed an executive order to provide lower-cost plans in the individual insurance market and is poised to end payments to insurers that offset subsidies to low income consumers. Nevertheless, UnitedHealth anticipates that any impact will be extremely small.