Healthcare stocks tied to Presidential outcome
The fate of hospital stocks seems to be closely tied to President Barack Obama's chances at reelection, reported the Milwaukee Journal-Sentinel. The trading prices of for-profit hospital operators such as HCA Holdings have closely tracked Obama's performance in election polling.
During a surge in the President's numbers leading up to the first debate in Denver, HCA's stock climbed 3.6 percent, reported Bloomberg News. Meanwhile, a group of the top seven chains that Bloomberg tracks rose 7.3 percent during that period.
After GOP candidate Mitt Romney was perceived to have won the first debate and his poll numbers climbed, HCA's stock dropped about 10 percent over the following week, according to Bloomberg.
"This election will have a significant impact on the group and how it trades," David Heupel, senior analyst in the Minneapolis office of Thrivent Investment Management Inc., told the Journal-Sentinel.
Stock analyst Sheryl Skolnick said Romney's promises to repeal the Affordable Care Act have affected hospital stocks, which are expected to be hurt by such a measure. "In the absence of a strong current fundamental and positive view, the hospital stocks likely get whipped around depending on whether the trade is 'Reform On' or 'Reform Off,'" Skolnick told Bloomberg. She added that hospital stocks could drop 10 percent or more if Romney is elected.
HCA's stock has since rebounded about 7.5 percent following the first debate, after stronger performances by Obama and a slowing of Romney's momentum in the polls. Other hospital stocks have performed similarly.
According to Bloomberg, keeping the ACA in place may hurt the stocks of publicly-traded health plans because they face new taxes and regulations with its full implementation.
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