Key Highlights

● Labcorp reported higher revenue and earnings per share.

● The company raised its full-year EPS guidance.

● Health care was among the stronger S&P 500 sectors that day.

● Labcorp serves both clinical testing and drug-development customers.

Labcorp Holdings (NYSE:LH) surged on Wednesday, October 28, finishing among the top gainers in the S&P 500 after the laboratory testing giant raised its full-year earnings guidance.

The move stood out on a day when the broader market inched higher and most of the excitement was concentrated in artificial intelligence and semiconductor stocks.

A Beat-and-Raise Quarter

Labcorp reported higher revenue and higher earnings per share for the quarter, according to market reports. More importantly for investors, it raised its full-year EPS guidance, a step that points to an expectation that the momentum will carry through the final months of the year.

A guidance increase late in the year carries weight because it leaves less room for surprises. When a company lifts its outlook with only one quarter remaining, investors tend to read it as a sign that demand trends are solid and visible.

What Labcorp Does

Labcorp is one of the largest clinical laboratory operators in the United States, running routine and specialty diagnostic tests for doctors, hospitals and patients. It also provides central laboratory and other services to pharmaceutical and biotech companies running clinical trials.

That mix gives it exposure both to everyday health-care demand, such as blood work and screening, and to research spending by drugmakers. Steady testing volumes and pricing tend to drive results in the diagnostics business, while biotech funding and trial activity shape the drug-development side.

Health Care Joins the Advance

Health care was among the eight of 11 S&P 500 sectors that finished higher on Wednesday. GE HealthCare (NASDAQ:GEHC) also jumped after lifting its full-year guidance, while Boston Scientific (NYSE:BSX) slid after trimming its forecast, with chief executive Mike Mahoney describing it as a challenging year.

About 200 S&P 500 companies have reported so far this earnings season, and a large majority have beaten estimates, according to LSEG data. Several companies that paired results with a higher outlook were among Wednesday's gainers.

What to Watch

The S&P 500 rose 21.38 points to close at 7,743.98, its third straight gain, as the Federal Reserve left its benchmark rate range unchanged in a 10-2 vote. Merck (NYSE:MRK) reports before the open on Thursday, offering another read on the health-care sector, alongside Mastercard (NYSE:MA) and Caterpillar (NYSE:CAT).

The advance estimate of third-quarter GDP and September PCE inflation data arrive at 8:30 a.m. ET on Thursday, both of which will shape expectations for the Fed's December meeting.