Insurers, Distributors Lose Ground After Speech

March 04, 2010 | MarketWatch

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MarketWatch
March 3, 2010 Wednesday 4:41 PM EST
SECTION: NEWS & COMMENTARY; Healthcare; Health-care Stocks
LENGTH: 298 words
HEADLINE: Insurers, distributors lose ground after speech
BYLINE: Russ Britt, MarketWatch mailto:rbritt@marketwatch.com.

Russ Britt is the Los Angeles bureau chief for MarketWatch.

LOS ANGELES (MarketWatch) -- Health insurers hung on to gains Wednesday after President Barack Obama exhorted lawmakers to move forward with a health care-reform plan that included tougher regulation of the nation's carriers.

Meanwhile, a number of drug distributors lost ground after the speech, with many down more than 1%.

Most major insurers had been up 1% or more ahead of the Obama speech but started losing ground afterward.

WellCare (WCG) led the sector, climbing more than 4.5% after Stifel Nicolaus raised its rating on the company's shares to buy from hold. The company's stock has dropped in recent weeks on a lowered outlook, but an improved picture for Medicare and Medicaid programs has helped temper that. WellCare had been up more than 6% at one point.

Amerigroup Inc. (AGP) still managed to retain gains of 1.4%, while Cigna Corp. (CI) and Aetna Inc. (AET) were both up close to1% .

The nation's biggest carrier, UnitedHealth Group Inc. (UNH) , was up 0.4% while top rival WellPoint Inc. (WLP) tacked on roughly 0.7%. HealthNet Inc. eked out gains of 0.9%, and Humana Inc. (HUM) ended the day unchanged.

But Obama's proposals to eliminate "wasteful" subsidies of pharmaceutical companies took a bite out of drug distributors.

Drug distribution giants McKesson Corp. (MCK) and AmerisourceBergen Corp. (ABC) dropped more than 1.5% while Cardinal Health (CAH) lost 1.1%. Pharmacy benefit manager Medco Health Solutions was off 1.4%.

And hospitals and nursing facilities were mixed despite posting healthy gains earlier in the session. Kindred Healthcare Inc. (KND) was up more than 1.1% while HealthSouth Corp. (HLS) dropped 1.5% in afternoon dealings.