Worsening Drops in Health Care Stocks Erase Early Gains

A worsening drop in major health care stocks is pulling major U.S. market indexes lower in midday trading on Wall Street Thursday, erasing an early gain.

UnitedHealth Group and Merck fell, but financial companies held on to their gains from earlier in the day. Prudential and MetLife rose. Rising bond yields, which allow banks to charge higher interest on loans, helped lift the sector.

The midday drop gave back some of the ground the market won a day earlier, after minutes from the latest Federal Reserve meeting showed that the majority of officials want to keep interest rates unchanged in 2019. Investors want the central bank to take a more laid-back approach to avoid triggering a market slump.

Corporate earnings are the next key catalyst for investors. Major banks, including Wells Fargo and JPMorgan Chase, will report their first-quarter results on Friday. Delta led a rally in airline stocks Wednesday after reporting solids results.

Investors are also keeping a close eye on international developments, including The European Union’s deadline extension for Britain’s departure. Britain now has until October 31 to develop a plan for its exit from the bloc.

KEEPING SCORE: The S&P 500 index fell 0.1% as of 12:30 p.m. The Dow Jones Industrial Average fell 40 points, or 0.1%, to 26,119. The Nasdaq composite fell 0.2%.

POWER OUTAGE: Tesla slumped 2.7% following news reports that the electric maker would hold off on a key battery plant expansion in the U.S. The stalled expansion follows Tesla’s report earlier in April of a first-quarter slowdown in production and demand.

SCRATCHY LINENS: Bed Bath & Beyond, which has been struggling recently and is being targeted by a number of activist investors, slumped 8.5% in heavy trading after the company reported a drop in a key sales measure that was worse than analysts were expecting.

NAILED IT: Fastenal rose 4.5% after the maker of fasteners, nails and other hardware pushed past first-quarter forecasts.

The company cited strong demand from construction and industrial customers that pushed sales 10.4% higher. It also increased prices for some of its products to combat higher costs from tariffs.

IPO SPOTLIGHT: Two technology companies hit the market running. PagerDuty soared 60% in its first day of trading as a public company, and Tufin Software surged 40%. The Israel-based company provides network security software. Investors will be paying close attention later Thursday when ride-hailing giant Uber is expected to file documents ahead of its own highly anticipated initial public offering.