Markets Caught Off Guard By Health Care Ruling
LINDA WERTHEIMER, HOST:
Yesterday's ruling on health care took the financial markets by surprise. Stocks were mixed with some shares finishing the day sharply higher. By the end of the day, stock traders seemed to shrug off the ruling.
NPR's Jim Zarroli reports.
JIM ZARROLI, BYLINE: The market was already down a lot when the ruling was issued because of new concerns about Europe and the losses at JPMorgan Chase. The ruling sent stocks down even more and all of the major indexes were down more than one percent. But by the end of the day, prices had come back a lot and the Dow finished down just point two percent.
For all the talk about how bad the bill is for businesses, the stock market seemed to take the ruling in stride.
Jim Paulsen, chief investment strategist at Wells Capital Management, believes investors are simply glad to get past the uncertainty about health care.
JIM PAULSEN: And whether it's bad or good, at least companies can now settle down and start to make some decisions. And personally, I think that will be the fallout from this, is you're going to see companies starting to move on.
ZARROLI: But among individual stocks, the reaction was somewhat more dramatic. Hospital stocks like HCA were up as much as 10 percent. Because people will be required to get health insurance under the law, hospitals may no longer have to swallow as many unpaid bills as they now do.
But medical device companies, which have to pay a new excise tax on their sales under the bill, lost ground. So did insurance companies. That's because the legislation will require insurers to accept a lot more customers, including people with pre-existing conditions, and that could hurt their bottom line quite a bit.
But by the end of the day, they had rebounded somewhat. Wellpoint was down as much as eight percent during the day but it finished just five percent lower.
Jim Zarroli, NPR News. Transcript provided by NPR, Copyright National Public Radio.