The major domestic equity indexes closed out Monday in negative territory as an unexpected decline in Chinese exports reignited worries of a global economic slowdown and prompted caution among investors with the start of corporate earnings season.

China’s exports unexpectedly fell the most in two years in December and imports also contracted. The decline pointed to further weakening of the world’s second-largest economy and faltering global demand. 

Chipmakers, which receive a sizable portion of their revenue from China, took a hit, with the Philadelphia SE Semiconductor Index down 1.6 percent. The technology sector’s index fell 0.9 percent and was the largest drag on the S&P 500.

As worries over global growth have mounted, lofty expectations for corporate growth have subsided. Analysts now estimate that S&P 500 earnings will grow 14.3 percent year-over-year for the fourth quarter, whereas in October they forecast a 20.1-percent increase, according to IBES data from Refinitiv.

Apple pointed to slowing demand in China when it reduced its revenue forecast on January 2.

However, earnings season began on a positive note as Citigroup exceeded earnings estimates. The Citigroup’s shares rose 4.0 percent and aided the S&P financial sector, with the sector’s index rising 0.7 percent.

JPMorgan Chase and Wells Fargo are set to report earnings on Tuesday.

Adding to the downbeat mood on Monday, the partial government shutdown entered its 24th day, making it the longest shuttering of federal agencies in U.S. history.

Shares of PG&E fell 52.4 percent after the utility said it was preparing to file for Chapter 11 bankruptcy for all of its businesses due to the recent wildfire in California.

Despite Monday’s decline, the S&P 500 is up nearly 10 percent from its Christmas Eve low as optimism over U.S.-China trade talks and expectations that the Fed will slow its pace of interest-rate hikes have driven a recent stock rally.

Approximately 6.8 billion shares changed hands on the major domestic equity exchanges on Monday, as compared to the 8.83 billion average over the past 20 trading days.

Healthcare a Bright Spot

One of the rare market bright spots last year was the healthcare sector and it remains a Wall Street darling despite a slow start to 2019.

As 2019 begins, the S&P 500 healthcare index is the most favored of the 11 main S&P 500 sectors, according to a Reuters review of ratings from 13 large Wall Street research firms, which recommend how to weigh those groups in investment portfolios.

Healthcare shares overall rose 4.7 percent last year, one of only two S&P 500 sectors, along with utilities, to post positive returns in 2018 as the benchmark index fell 6.2 percent.

Cited are the healthcare sector’s reasonable valuations, strong balance sheets and dividend payments among many companies, as well as the group’s upbeat outlook for earnings, which are less susceptible to economic cycles than other businesses.

If economic growth is slowing, some investors are wary of being too invested in cyclical sectors that thrive during an upswing, but do not want to be too defensive either.

Such diversity stems from the variety of companies comprising the sector: manufacturers of prescription medicines, makers of medical devices, such as heart valves and knee replacements, health insurers, hospitals and providers of tools for scientific research.

From a stock perspective, that means the sector includes potential fast-growing stocks, such as biotech that can carry more risk and more reward, or large pharmaceutical companies and others that offer steadier, slower growth.

For 2019, healthcare companies in the S&P 500 are expected to increase earnings by 7.5 percent, ahead of the 6.3 percent growth estimated for S&P 500 companies overall, according to IBES data from Refinitiv.

Health insurer UnitedHealth Group the sector’s third-largest company by market value, kicks off fourth-quarter earnings season for healthcare on Tuesday.

Healthcare shares could also benefit from anticipation of increased deal making activity after two large biotech acquisitions were already announced this year.

Despite healthcare’s outperformance last year, the sector is trading at the same valuation as the S&P 500 – 14.5 times earnings estimates for the next 12 months – whereas healthcare on average has held a premium over the market for the past 20 years, according to Refinitiv data.

The sector also is valued at a discount, by such price-to-earnings measures, to defensive sectors, including consumer staples, which trades at 16.6 times forward earnings, and utilities, which trade at 15.8 times.

According to the Reuters review of sector weightings, healthcare is followed by financials and then technology. Real estate ranks as the most negatively rated group.

The healthcare sector has lagged in the early days of 2019, rising less than 1 percent against a 3 percent rise for the S&P 500.

The healthcare sector struggled ahead of the 2016 election, with the high cost of prescription medicines a prominent issue during the presidential campaign. With renewed scrutiny on drug pricing, such concerns linger.

The sector could suffer if investors become more optimistic about economic growth and flee defensive stocks, while the popularity of healthcare as an investment could work against it if trading becomes overly crowded.