Medical Insurers and Pharma Firms' Stock Slipped Thursday. Here's Why.
Health insurance firms were some of Thursday's worst-performing stocks in both the S&P 500 and Dow Jones Industrial Average.
Elevance Health shares plunged after the insurer lowered its outlook because of what CEO Gail Boudreaux called an 'unprecedented cost trend."
Investors appeared to lose confidence in other companies that sell health insurance, as well as pharmaceutical companies.Medical insurers and pharmaceutical companies' stock fell Thursday, weighed down by Elevance's downbeat outlook and other factors.
Health care was the worst-performing sector in the S&P 500 Thursday, while the index—and nearly all the other sectors within it—was on track to post modest gains. UnitedHealth Group (UNH), which provides health insurance and other services, was the worst-performing stock in the Dow Jones Industrial Average.
Elevance Health (ELV) shares plunged 12%, making it the worst-performing stock in the S&P 500. The medical insurer lowered its outlook for a second consecutive year because of an 'unprecedented cost trend affecting multiple lines of business,' CEO Gail Boudreaux said on a conference call, according to a transcript from AlphaSense.
Investors responded by selling other medical insurers' shares, with shares of Molina Healthcare (MOH) recently falling about 5%, of Centene Corp. (CNC) dropping 5% and of Cigna Group (CI) dipping 2%. UnitedHealth was down about 1%.
Centene pulled its full-year guidance in early July, while UnitedHealth pulled its outlook in May.
Some investors also appeared to sour on pharmaceutical companies. Shares of Abbott Laboratories (ABT), which makes medicine and nutritional products like Ensure, were recently down nearly 8%. Abbott narrowed its outlook for the year, noting declining demand for COVID-19 tests.
Shares of the pharmaceutical company Eli Lilly (LLY) were recently off by 3%
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