Democrats' Comments Give Health-Care Stocks a Stronger Pulse
June 27 2019 - 2:54PM
Dow Jones News
By Alexander Osipovich
Beaten-down health-care stocks are seeing some relief Thursday,
a day after most Democratic presidential candidates shied away from
forcefully endorsing plans to nationalize the U.S. health-insurance
industry.
The moves come after such stocks have lagged behind the broader
market in 2019. Insurance stocks in particular fell sharply in
April, when Vermont Sen. Bernie Sanders introduced a bill that
would extend government-run health insurance to every American,
dubbed Medicare for All.
But at Wednesday night's closely watched debate with 10
Democratic contenders, most hesitated to embrace a total federal
takeover of health care. Massachusetts Sen. Elizabeth Warren and
New York City Mayor Bill de Blasio were the only two who raised
their hands when asked if they would eliminate private insurance as
part of a Medicare-for-All plan.
"There was trepidation entering the debates, and we came away
without a single new idea on healthcare reform," said Josh Raskin,
an analyst with Nephron Research who covers health insurers.
Shares of insurance company UnitedHealth Group Inc. were up 1.6%
in afternoon trading, while Anthem Inc. and Humana Inc. were up
1.6% and 1%, respectively. That helped make health care one of the
best-performing sectors in the S&P 500 on Thursday.
Historically, investors have been attracted to health-care
stocks for their growth and defensive nature. But they can also be
sensitive to shifts in government regulation, concerns that have
pummeled their prices in recent months.
Mr. Raskin said such jitters are now subsiding. "With every
passing day, we move further from the tail risk of a single-payer
system, an ideal that is clearly not shared by the majority of the
Democratic candidates, " he said.
Still, health care remains the worst-performing sector in the
S&P 500 this year, having risen 6.7% from the start of 2019
while the broader index has climbed nearly 17%.
Other health-related stocks were also up Thursday. CVS Health
Corp., whose business spans from pharmacies to insurance plans
since its acquisition of Aetna last year, was up 2.1%.
Rite Aid Corp. soared 25% after Amazon.com said it would allow
shoppers to pick up purchases at specialized counters in more than
1,500 Rite Aid locations.
Walgreens Boots Alliance Inc., which has struggled this year
with a slumping business and ailing stock price, was up 4.8% after
it reported better-than-expected earnings.
Write to Alexander Osipovich at
alexander.osipovich@dowjones.com
(END) Dow Jones Newswires
June 27, 2019 14:39 ET (18:39 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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