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US: Stocks drop; hospitals surge on pro-Obamacare court ruling
[NEW YORK] Health stocks soared on Thursday after the Supreme Court upheld a key provision of President Barack Obama's health care reform, but the broader market fell on worries of a Greek default.
The Dow Jones Industrial Average dropped 75.71 (0.42 per cent) to 17,890.36.
The broad-based S&P 500 fell 6.27 (0.30 per cent) to 2,102.31, while the tech-rich Nasdaq Composite Index lost 10.22 (0.20 per cent) at 5,112.19.
Hospital stocks like HCA Holdings (+8.8 per cent) and Tenet Healthcare (+12.2 per cent) benefited from the Supreme Court ruling that the federal government has authority to subsidize health insurance by giving tax credits to consumers nationwide.
The provision is a key tenet of the Obama plan, guaranteeing insurance coverage to millions of Americans.
But Greece and its international creditors again failed to break the deadlock in emergency talks, again raising the prospect of a messy Greek debt default at the end of the month.
Health insurers also rose, not only due to the Supreme Court ruling on the Obama plan, but on reports of likely consolidation in the sector.
Health insurer Humana jumped 7.1 per cent following a Bloomberg report that it could reach a deal as soon as this weekend to be acquired by industry giant Aetna, which gained 4.0 per cent. Anthem and Cigna, which have been seen as possible merger partners in the insurance sector, rose 1.4 per cent and 2.4 per cent.
IAC/InterActiveCorp jumped 5.1 per cent after announcing plans for an inital public offering of The Match Group, which encompasses five online dating programmes. The company also said it had promoted Joey Levin, formerly head of search and applications, to chief executive.
Drug company Eli Lilly bolted 3.1 per cent higher following a victory in a British patent case that protects the exclusivity of its Alimta vitamin regimen used in cancer treatment.
Bond prices fell. The yield on the 10-year US Treasury rose to 2.40 per cent from 2.37 per cent Wednesday, while the 30-year advanced to 3.17 per cent from 3.15 per cent. Bond prices and yields move inversely.