Hospital stocks jump after health care ruling
WASHINGTON — Stocks of hospital companies rose sharply and insurance companies fell Thursday after the Supreme Court upheld a requirement that almost all Americans carry health insurance.
The stock of Hospital Corp. of America, the largest private hospital chain in the United States, rose a little more than 7 percent. Quest Diagnostics, which runs laboratories, rose almost 3 percent.
Gary Taylor, a financial analyst for Citi Investment Research, wrote in a note to clients that the ruling was “a surprise win for hospital companies,” which stand to benefit from tens of millions more people getting health insurance.
He cautioned that hospital stocks could “erase all their gains” from the court decision if Mitt Romney defeats Obama in the presidential election this fall. Romney has pledged to repeal the law.
Insurance companies were down sharply as analysts rushed to sort out the ruling. UnitedHealth Group stock fell almost 3 percent, WellPoint 6 percent and Aetna 3.6 percent.
The broader stock market was down a little more than 1 percent. The Dow Jones industrial average, which was down about 100 points before the ruling came out at 10 a.m. EDT, was down 160 points after the ruling.
Chief Justice John Roberts, in a break with other conservative justices on the high court, sided with the majority in allowing the law to go forward with its aim of covering more than 30 million uninsured Americans.
Stocks of the largest drug companies in the country were down but not heavily, in line with the broader market. Stocks of medical device makers were also down about the same as the broader market.
The court found problems with the law’s expansion of Medicaid but said the expansion could proceed under certain conditions.