Court Speaks, Markets Listen — Thursday’s IP Market Recap

by Marc Bastow | June 28, 2012 5:25 pm

IPMarketRecap Court Speaks, Markets Listen    Thursday's IP Market Recap[1]Thursday’s historic Supreme Court ruling[2] upholding the major tenets of President Barack Obama’s health care reform law ruled the day as investors tried to sort through the decision’s ramifications. Markets initially reacted negatively, as stocks sold off early on the announcement, but they managed to steady themselves just around noon and finished with fairly minimal losses.

Lost in the news of the day was a U.S. Bureau of Labor report that showed the number of Americans filing for first-time unemployment benefits fell last week, after matching the highest level of the year the week before.

The Nasdaq led the way down, dropping 0.9% to 2,849, while the Dow Jones Industrial Average — which at one point in the day saw every stock in the red — finished down 0.2% at 12,602; the S&P fell similarly to end at 1,329.

Investors are concerned that the so-called individual mandate[3] requiring all Americans to purchase health insurance will act like a tax, giving consumers another a reason to cut back on spending. In addition, concerns abound that businesses will be forced to spend more on health care and wind up spending less on big-ticket or luxury items.

The decision affected sectors in different ways[4].

Hospitals were the big winner on the day, with HCA Holdings (NYSE:HCA[5]) and Tenet Healthcare (NYSE:THC[6]) both up more than 10%. Community Health Systems (NYSE:CYH[7]) and Universal Health Services (NYSE:UHS[8]) both finished up over 8% on the day.

Health insurer WellPoint (NYSE:WLP[9]) sank 5% on the news[10], while Aetna (NYSE:AET[11]), Cigna (NYSE:CI[12]) and Coventry (NYSE:CVH[13]) all shed just more than 2%. Humana (NYSE:HUM[14]) and UnitedHealth (NYSE:UNH[15]) both managed to eke out small gains.

Also on Thursday, JPMorgan Chase (NYSE:JPM[16]) CEO Jamie Dimon admitted that initial estimates of losses on derivative trades[17] might be more than originally estimated. JPM struggled early in the session before staging a small rally to keep losses down to about 2%.

Discount retailers also were lower on the day after Family Dollar’s (NYSE:FDO[18]) earnings results[19] were not up to snuff, dropping the stock 2.8% on the day. Dollar Tree (NASDAQ:DLTR[20]) followed suit, down 2.4%, and Dollar General (NYSE:DG[21]) was down a fraction.

Three Up

Three Down

Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing he did not hold a position in any of the aforementioned securities.

Endnotes:
  1. [Image]: http://investorplace.com/hot-topics/investorplace-market-recap/
  2. Supreme Court ruling: http://investorplace.com/investorpolitics/heres-the-effect-of-obamacare-on-your-investments-in-just-1-sentence/
  3. individual mandate: http://investorplace.com/investorpolitics/who-wins-in-americas-path-to-single-payer-health-care/
  4. affected sectors in different ways: http://investorplace.com/2012/06/a-ruling-thats-good-for-health-care-stocks/
  5. HCA: http://studio-5.financialcontent.com/investplace/quote?Symbol=HCA
  6. THC: http://studio-5.financialcontent.com/investplace/quote?Symbol=THC
  7. CYH: http://studio-5.financialcontent.com/investplace/quote?Symbol=CYH
  8. UHS: http://studio-5.financialcontent.com/investplace/quote?Symbol=UHS
  9. WLP: http://studio-5.financialcontent.com/investplace/quote?Symbol=WLP
  10. sank 5% on the news: http://investorplace.com/2012/06/wellpoint-wlp-scotus-health-care-obamacare/
  11. AET: http://studio-5.financialcontent.com/investplace/quote?Symbol=AET
  12. CI: http://studio-5.financialcontent.com/investplace/quote?Symbol=CI
  13. CVH: http://studio-5.financialcontent.com/investplace/quote?Symbol=CVH
  14. HUM: http://studio-5.financialcontent.com/investplace/quote?Symbol=HUM
  15. UNH: http://studio-5.financialcontent.com/investplace/quote?Symbol=UNH
  16. JPM: http://studio-5.financialcontent.com/investplace/quote?Symbol=JPM
  17. initial estimates of losses on derivative trades: http://investorplace.com/2012/06/jpmorgan-chase-trading-loss-may-hit-9b-shares-drop/
  18. FDO: http://studio-5.financialcontent.com/investplace/quote?Symbol=FDO
  19. earnings results: http://investorplace.com/2012/06/family-dollar-q3-earnings-narrowly-miss-shares-fall/
  20. DLTR: http://studio-5.financialcontent.com/investplace/quote?Symbol=DLTR
  21. DG: http://studio-5.financialcontent.com/investplace/quote?Symbol=DG
  22. ACI: http://studio-5.financialcontent.com/investplace/quote?Symbol=ACI
  23. LNG: http://studio-5.financialcontent.com/investplace/quote?Symbol=LNG
  24. SKS: http://studio-5.financialcontent.com/investplace/quote?Symbol=SKS
  25. ARNA: http://studio-5.financialcontent.com/investplace/quote?Symbol=ARNA
  26. KORS: http://studio-5.financialcontent.com/investplace/quote?Symbol=KORS
  27. LULU: http://studio-5.financialcontent.com/investplace/quote?Symbol=LULU

Source URL: http://investorplace.com/2012/06/the-court-speaks-markets-listen-thursdays-ip-market-recap-aet-wlp-cvh-hum-ci-unh/
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