Home Money Health care stocks surge after Sen. McCain withdraws support for GOP bill

Health care stocks surge after Sen. McCain withdraws support for GOP bill

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U.S. stocks came off session lows Friday as health care stocks recovered most of their losses.

Health care stocks, which were one of the worst performers in the S&P 500 earlier in the day, climbed more than half a percent from session lows to attempt slight gains. Top gainers included Centene, HCA Healthcare and Universal Health Services.

The move in biotech and pharmaceutical stocks came after Sen. John McCain, R-Ariz., on Friday said he “cannot in good conscience vote for the Graham Cassidy proposal.

McCain is one of four Republican senators who are undecided on the GOP healthcare overhaul, and his opposition dealt the bill’s chances a significant blow.

The Dow Jones industrial average came off earlier lows, falling 32 points, with Apple continuing to add to its weekly decline. The company is on track for its worst week since April 2016.

The Nasdaq composite also pared its losses, down 0.01% as health care gathered steam.

The Senate’s Graham-Cassidy bill would have set up a block-grant system to allot money to the states. A majority of state governments would take a multibillion-dollar hitfrom the proposal, according to an analysis from the Kaiser Family Foundation.

“In general, the fact is that this last-ditch effort to pass the health care bill was not baked in,” said Art Hogan, chief market strategist at Wunderlich Securities. “There’s just too much of a groundswell against it.”

Who’s right — President Donald Trump and Sen. Bill Cassidy, or late-night host Jimmy Kimmel? Associated Press journalist Ricardo Alonso-Zaldivar broke down the bill, the facts and spoke about the Kimmel-Cassidy feud. (Sept. 21) AP

The political tensions eclipsed investor attention to end the week after the Federal Reserve hinted Wednesday that a final rate hike in December remains likely. The majority of voting members indicated that they still foresee an increase by year’s end.

Inflation measures have remained largely unimpressive recently, keeping investors skeptical of an additional hike this year. The core personal consumption expenditures (PCE) price index, the Fed’s preferred inflation measure, increased 1.4% in the 12 months through July. That was the smallest year-on-year increase since December 2015.

But looking ahead to next week, all eyes will be fixed on the PCE’s latest reading said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management Company.

“Anything that gives us a hint of what inflation looks like. That’s the big data point,” he said. “Each and every central bank around the globe is talking about tapering or ending quantitative easing.”

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