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UnitedHealth ( UNH ) gains on Q1 profit beat

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Fed Chair Jerome Powell to speak at 1:15 pm ET

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Indexes: Dow up 0.23%, S&P down 0.13%, Nasdaq down 0.06%

(Updated at 11:38 a.m. ET/1538 GMT)

By Shashwat Chauhan and Shristi Achar A

April 16 (Reuters) -

The Nasdaq and the S&P 500 were muted on Tuesday as higher

Treasury yields pressured equities, though the blue-chip Dow

bucked the trend on robust results from health insurance

heavyweight UnitedHealth ( UNH ).

Dow Component UnitedHealth Group advanced 5.6% after

the health insurer beat expectations for first-quarter adjusted

profit.

The gains were, however, kept in check as the yield on

the 10-year government bond hit fresh five-month

highs, a day after data showed U.S. retail sales increased more

than expected in March amid a surge in receipts at online

retailers, further indicating a solid first quarter for the U.S.

economy.

"(Fed rate expectations) are getting reassessed since

the CPI (consumer price index) print last week, and the

probability of higher for longer is sinking in," said Michael

James, managing director of equity trading at Wedbush

Securities.

"That's having an effect on the weakness that's been

seen not just today, but for the last week since the CPI print."

Meanwhile, Israel's war cabinet was set to meet for the

third time in three days, an official said, to decide on a

response to Iran's first-ever direct attack.

Several policymakers including Federal Reserve Chair Jerome

Powell are slated to speak later in the day, and investors will

be watching for clues on where the central bank stands on policy

easing.

Fed Vice Chair Philip Jefferson said "it will be appropriate

to hold in place the current restrictive stance of policy for

longer" if inflation fails to slow as expected.

Both the S&P 500 and the Nasdaq are nearly 4% off from

record high levels reached last month, as traders sharply

readjusted their expectations of how much the Fed would cut

rates this year.

Money market participants see only 42 basis points of

easing, according to LSEG data. This is down from about 150 bps

seen at the start of the year.

Most rate-sensitive sectors were the worst hit, with real

estate and utilities down over 1% each.

At 11:38 a.m. ET, the Dow Jones Industrial Average

was up 87.80 points, or 0.23%, at 37,822.91, the S&P 500

was down 6.53 points, or 0.13%, at 5,055.29, and the Nasdaq

Composite was down 8.89 points, or 0.06%, at 15,876.13.

Morgan Stanley ( MS )

added 3.7% after beating first quarter profit

estimates, fueled by a resurgence in investment banking.

Bank of America ( BAC ) fell 3.9% after the lender reported

a drop in first-quarter profit as it set aside more money to

cover souring loans.

Johnson & Johnson ( JNJ ) slipped 1.6% as the drugmaker's

first-quarter revenue missed analysts' estimates after sales

from its blockbuster psoriasis drug, Stelara, fell short of

expectations.

Tesla shed 2.2% after falling over 5% in the last

session, when an internal memo seen by Reuters showed the EV

marker was laying off more than 10% of its global workforce.

Declining issues outnumbered advancers for a 2.49-to-1 ratio

on the NYSE and for a 1.86-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week high and seven new

lows, while the Nasdaq recorded 12 new highs and 272 new lows.