Health care sector falls as likelihood of ACA repeal rises; UnitedHealth's stock leads Dow losers
The health care sector traded broadly lower Tuesday, amid concerns over the potential effects of the Graham-Cassidy bill (http://www.marketwatch.com/story/house-passage-of-obamacare-repeal-wouldnt-be-slam-dunk-clinton-urges-government-workers-not-to-quit-2017-09-19), which some analysts say is becoming increasingly likely to repeal and replace the Affordable Care Act. The SPDR Health Care Select Sector ETF (XLV) shed 0.9% in afternoon trade, with 56 of its 62 components trading lower. Among the XLV's most heavily-weighted components, UnitedHealth Group's stock (UNH) dropped 1.8% to pace the Dow Jones Industrial Average's decliners. The price decline of $3.61 was shaving 25 points off the Dow, which was up 44 points. Analyst Ana Gupte at Leerink Research said the bill could lead to "greater earnings downside in the near term than previous House and Senate bills for ACA-levered stocks." Among companies that Gupte said are at particular risk, shares of Centene Corp. (CNC) slumped 4.6% and Molina Healthcare Inc. (MOH) gave up 6.1%. Elsewhere, shares of Aetna Inc. (AET) fell 3.4%, Humana Inc. (HUM) slid 3.2%, Cigna Corp. (CI) declined 1.9% and Anthem Inc. (ANTM) was down 2.0%. Gupte said diversified managed care organizations (MCOs) like Humana and Cigna are more defensive, though exposure should be manageable for UnitedHealth, Aetna and Anthem. The XLV has gained 4.3% over the past three months, while the S&P 500 has tacked on 2.2%.
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
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