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December 12, 2017
Thursday, June 25, 2015

Wall St ends lower, but health stocks rally

US stocks ended a quiet session with modest losses today, but healthcare stocks rallied after the US Supreme Court upheld tax subsidies key to US President Barack Obama's signature healthcare reform law.

Energy shares drove the day's weakness, falling alongside crude oil prices, while uncertainty surrounding Greece also limited positive sentiment. Transport stocks, considered a proxy for economic activity, entered correction territory, closing 10.6 percent below a December 29 closing high.

The S&P 500 healthcare index rose 0.5 percent after the court ruled that the 2010 Affordable Care Act, widely known as Obamacare, did not restrict the subsidies to states that establish their own online healthcare exchanges.

Hospital operators were among the biggest beneficiaries of the ruling, with investors relieved that the growing number of paying customers created by Obamacare would not disappear.

Tenet Healthcare jumped 12 percent to $56.21 as the S&P 500's biggest percentage gainer on the day, followed by HCA Holdings, up 8.8 percent to $90.72. Universal Health Services rose 7.7 percent to $140.78.

The S&P 500 healthcare sector trades at 24.3 times analysts' estimates of future earnings, while the S&P 500's forward P/E is 17.6, according to Thomson Reuters data.

The Dow Jones industrial average fell 75.71 points, or 0.42 percent, to 17,890.36, the S&P 500 lost 6.27 points, or 0.3 percent, to 2,102.31 and the Nasdaq Composite dropped 10.22 points, or 0.2 percent, to 5,112.19.

In Europe, shares trimmed losses as talks began in Brussels on a financing-for-reforms deal with Greece to avert a fast-approaching possible debt default.

The pan-European FTSEurofirst 300 index ended down 0.3 percent.

However, telecoms stocks were standout gainers as investor expectations of deal-making remained high in the wake of Vivendi's stake increase in Telecom Italia.

Greek markets rose with traders citing growing optimism for some kind of deal despite grinding uncertainty over the outcome of the talks in Brussels and varying opinions on whether the markets expect a Greek default.

Greece's benchmark ATG share index rose 0.5 percent. The country's banking index also rose 0.5 percent.

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