Healthcare Stocks Up Big on Supreme Court Ruling

Markets fell across the board in trading today. The Dow dipped 75.71 points to close the day at 17,890.36. The NASDAQ fell 10.22 points to 5,112.19. The S&P 500 was down as well, dropping 6.27 points to close out the day at 2,102.31.

Supreme Court Upholds Obamacare, Healthcare Stocks Boom

The Supreme Court ruled 6 - 3 this morning that the Affordable Care Act would continue to operate as it has since the beginning. The concern was over Federal subsidies to the state exchanges, and whether or not the system in place is constitutional.
This ruling should put to rest any worries on the part of health insurance companies over whether or not they'll continue to receive state payments in some cases.

The Health Services sector, which has continued to lead the economy in gains for the past year, saw a bounce today. This latest round of news is good for health care companies and the sector as a whole. Profits have been higher than average as millions more Americans choose an insurance plan. The law has also lead to a boom for health services companies, like research labs and testing facilities, which are seeing an increase in business thanks to the new patients.

All of today's top 5 market gainers were from the Health Services sector, with both Tenet Healthcare Group (THC) and Zoetis (ZTS) reaching over 10% in growth. Humana (HUM),  Universal Health Services (UHS), and HCA Holdings (HCA) each gained over 7%.

Worries Over Greece Drive the Market Down

Part of the reason that domestic and world markets ended the day lower has to do with the current situation in the European Union. The problem is that many member nations are in debt with no signs of the situation improving. Greece is the most often-used example because the situation there is so bad, but Italy and Spain have problems as well.

The chorus of worries has grown so loud that some analysts are looking at the possibility of a “Grexit,” or Greek exit of the European Union. Such a move would be the first in the history of the union. There are real fears that a single nation leaving the union could spark others to follow along with them, weakening the EU as a whole. Some analysts also worry over whether the union as a whole could collapse due to debt.

We'll continue to see the situation played out in a few different ways. On some days, fears over the fate of the European Union will affect domestic markets. The Euro will also suffer, and it's already trading near record lows. Unless Europe can get a handle on debt, jobs, and immigration issues, its economy is going to continue to suffer.
Published on Jun 25, 2015
By Aaron Phillips
Aaron Phillips is a financial researcher and journalist based out of Michigan. He regularly writes the IG Daily and IG Weekly columns.

Copyrighted 2020. Content published with author's permission.

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