Health Care, Once a Leader, Stumbles
16 Avril 2019 - 10:42AM
Dow Jones News
By WSJ City
Major US stock indexes are marching to new highs but this time
it's with little help from the S&P 500's best-performing sector
last year: health care.
In fact it's the worst-performing sector in the S&P 500 so
far this year, with shares up 3.8% compared with the broader
index's 16% gain.
KEY FACTS
--- The threat of tighter health-care regulation has pulled down
shares this year.
--- Walgreens Boots Alliance this month cut its annual earnings
forecast amid a profit squeeze related to rebates it receives from
makers of generic drugs.
--- CVS Health Corp. did the same in February.
--- Others will be closely watched. Johnson & Johnson and
UnitedHealth are scheduled to release results Tuesday.
--- Concerns over stringent regulation on managed-care
businesses have pressured stocks with Medicare exposure.
--- For example, shares of insurers UnitedHealth, Humana and
Cigna are all down by double-digit percentages in 2019.
"Investors are scared about the massive amount of uncertainty in
terms of regulation. There's a critical eye around the health-care
space and drug pricing. These challenging trends do give us some
worry."
Brock Moseley, founder of Miracle Mile Advisors in Los
Angeles
Why This Matters
Some investors expect the sector's headwinds to subside in the
long term. Health-care providers are currently leading growth in
the sector and are projected to report earnings growth of 15% for
the quarter, according to FactSet.
A fuller story is available on WSJ.com
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(END) Dow Jones Newswires
April 16, 2019 04:27 ET (08:27 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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