Market Wrap: Wall Street Ends Lower, but Health Stocks Rally
NEW YORK -- U.S. stocks ended a quiet session with modest losses Thursday, but health care stocks rallied after the Supreme Court upheld tax subsidies key to President Barack Obama's signature health care reform law.
Energy shares drove the day's weakness, falling alongside crude oil prices, while uncertainty surrounding Greece also limited positive sentiment. Transport stocks, considered a proxy for economic activity, entered correction territory, closing 10.6 percent below a Dec. 29 closing high.
The S&P 500 health care index rose 0.5 percent after the court ruled that the 2010 Affordable Care Act, widely known as Obamacare, didn't restrict the subsidies to states that establish their own online health care exchanges.
%VIRTUAL-pullquote-While any change in policy would've been a surprise, affirming the status quo removes a lot of uncertainty from the sector.%Hospital operators were among the biggest beneficiaries of the ruling, with investors relieved that the growing number of paying customers created by Obamacare wouldn't disappear.
Tenet Healthcare (THC) jumped 12 percent to $56.21 as the S&P 500's biggest percentage gainer on the day, followed by HCA Holdings (HCA), up 8.8 percent to $90.72. Universal Health Services (UHS) rose 7.7 percent to $140.78.
"While any change in policy would've been a surprise, affirming the status quo removes a lot of uncertainty from the sector," said Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.
The S&P 500 health care sector trades at 24.3 times analyst estimates of future earnings, while the S&P 500's forward P/E is 17.6, according to Thomson Reuters data.
The Dow Jones industrial average (^DJI) fell 75.71 points, or 0.4 percent, to 17,890.36, the Standard & Poor's 500 index (^GSPC) lost 6.27 points, or 0.3 percent, to 2,102.31 and the Nasdaq composite (^IXIC) dropped 10.22 points, or 0.2 percent, to 5,112.19.
Wall Street continued to take cues from the ongoing Greek debt crisis as the country again failed to clinch a deal with its international creditors, setting up a last-ditch effort Saturday to avert a default next week.
Eurozone finance ministers ended their third meeting in a week without agreement after the three creditor institutions put a final cash-for-reform proposal on the table in a showdown with Athens' leftist government.
Energy shares were the weakest of the day, with the S&P energy index down 1 percent. U.S. crude futures settled down about 1 percent at $59.70 a barrel, weighed by weaker U.S. refined fuels markets. Occidental Petroleum (OXY) fell 1 percent to $78.53.
IAC/Interactive (IACI) jumped 5.1 percent to $81.19 after the company said it planned to list its dating business, which includes Match.com and mobile app Tinder.
After the market closed, Dow component Nike (NKE) rose 2.2 percent to $107.50 after fourth-quarter results.
Declining issues outnumbered advancing ones on the NYSE by 1,964 to 1,100, for a 1.79-to-1 ratio; on the Nasdaq, 1,500 issues fell and 1,274 advanced for a 1.18-to-1 ratio favoring decliners.
The benchmark S&P 500 posted 16 new 52-week highs and 17 new lows; the Nasdaq recorded 119 new highs and 42 new lows.
About 5.7 billion shares traded on all U.S. platforms, according to BATS exchange data, compared with the month-to-date average of 6.1 billion.
What to watch Friday:
- The University of Michigan releases its final report on consumer sentiment for June at 10 a.m.