US STOCKS-Eli Lilly lifts S&P 500, UnitedHealth plummets

By Noel Randewich and Lisa Pauline Mattackal

April 17 (Reuters) - The S&P 500 rose on Thursday, lifted by Eli Lilly and Apple, as investors weighed progress in U.S. trade negotiations with Japan against concerns about the outlook for interest rates.

Traders leaned toward optimism following U.S. President Donald Trump's comments about "big progress" in the bilateral talks after Wednesday's steep selloff.

Trump also told reporters he expects to make a trade deal with China, although he offered no indication of how talks would get underway with the two superpowers at an apparent impasse .

Eli Lilly LLY.N surged 16% after the drugmaker said its experimental pill worked as well as blockbuster drug Ozempic to lower weight and blood sugar in a trial of diabetes patients.

Apple AAPL.O climbed 2%, with the iPhone recovering from some of its recent deep losses.

UnitedHealth UNH.N plunged 23% and kept the blue-chip Dow <.DJI> in negative territory after the insurer lowered its annual profit forecast on expectations of high medical costs for the rest of the year.

Other health insurers slumped, with CVS Health CVS.N down 1.3% and Humana HUM.N falling 7%.

U.S. stocks have been whiplashed in recent weeks by Trump's on-again off-again tariffs and his trade war with China.

The S&P 500 remains down about 6% since April 2, when Trump announced sweeping global tariffs that he later put on pause.

Investors are now laser-focused on talks with dozens of countries over the coming weeks for more clarity on the size and scope of tariffs on individual nations and sectors.

"The market wants Trump to announce trade deals," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa. "The market wants tangible results, and that's something the market is not getting."

The S&P 500 was up 0.85% at 5,320.69 points.

The Nasdaq rose 0.48% to 16,384.92 points, while the Dow Jones Industrial Average was down 0.69% at 39,396.67 points.

Of the 11 S&P 500 sector indexes, nine rose, led by energy .SPNY, up 3.4%, followed by a 2.6% gain in consumer staples .SPLRCS.

Trump said on Thursday in a social media post that Fed Chair Jerome Powell's termination "cannot come fast enough," and he called for the U.S. central bank to cut interest rates.

Wall Street stocks fell on Wednesday after Powell warned that Trump's trade policies risked fueling inflation while weakening economic growth.

"It's been known that Trump hasn't been happy with Powell. The question is, does he attempt to do anything about it?" said Tom Bruce, macro investment strategist at Tanglewood Total Wealth Management, adding that removing Powell would damage confidence in U.S. markets.

Traders have scaled back the probability of a May rate cut to about 6%, according to CME's FedWatch, while a Reuters poll showed economists see a higher probability of a U.S. recession in the next 12 months.

Data on Thursday showed the number of Americans filing new applications for unemployment benefits fell last week, suggesting labor market conditions remained stable in April, although uncertainty around tariffs is making businesses hesitant to boost hiring.

With the U.S. stock market closed for the Good Friday holiday, all three major Wall Street indexes were on track for their third weekly decline in four.

Alphabet's GOOGL.O shares dropped 1% after a federal judge ruled Google illegally dominated two markets for online advertising technology.

Netflix NFLX.O shares rose almost 2% ahead of results after the closing bell. Advancing issues outnumbered falling ones within the S&P 500 .AD.SPX by a 7-to-1 ratio.

The S&P 500 posted two new highs and two new lows. The Nasdaq recorded 26 new highs and 118 new lows.