Wall Street Reaches Intraday Records Even as Healthcare Slumps
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Version 0 of 1. Wall Street reached new intraday records on Friday, Oct. 13, even as the White House's surprise cut of healthcare subsidies rocked stocks in the sector. The Dow Jones Industrial Average was up 0.28%, the S&P 500 added 0.24%, and the Nasdaq increased 0.38%. Both the S&P 500 and Nasdag hit fresh intraday records. Health insurance stocks such as UnitedHealth Group Inc. (UNH) and Aetna Inc. (AET) slumped after President Donald Trump made his biggest move yet to dismantle the Affordable Care Act. The Department of Health and Human Services moved late Thursday, Oct. 12, to cut off subsidies to health insurers under the Obama-era Affordable Care Act. "We will discontinue these payments immediately," said acting HHS Secretary Eric Hargan and Medicare administrator Seema Verma. The White House said in a separate statement that the government cannot legally continue to pay the so-called cost-sharing subsidies because they lack a formal authorization by Congress. Halting the payments is likely to trigger a spike in premiums for next year, unless Trump reverses course or Congress authorizes the money. The next payments are due around Oct. 20. UnitedHealth, Aetna, Cigna Corp. (CI) , and Humana Inc. (HUM) all declined by more than 1%. Anthem Inc. (ANTM) tumbled 3%. The Health Care Select Sector SPDR ETF (XLV) decreased 0.4%. The third-quarter earnings season powered on with Bank of America Corp. (BAC) and Wells Fargo & Co. (WFC) reporting their quarterly performances. Bank of America posted higher quarterly profit than analysts estimated, driving shares 1.4% higher. Increasing interest rates fueled returns on lending enough to overcome sliding bond-trading revenue. Earnings of 48 cents a share rose 7 cents from a year earlier and beat estimates by 2 cents. Net income increased 13% to $5.6 billion. Revenue from trading bonds, currencies and interest-rate swaps fell 19% to $2.15 billion at Bank of America. JPMorgan Chase & Co. (JPM) and Citigroup Inc. (C) both saw a drop in trading revenue over their third quarter. The two reported earnings on Thursday, unofficially kicking off the third-quarter earnings season. Citigroup is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells C? Learn more now. More of What's Trending on TheStreet: Join us in New York City on Nov. 30 for The Deal Economy Conference, where leading industry experts and other influential members of the deal community will gather to discuss key issues that will confront dealmakers in 2018. |