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U.S. stocks inch down, as UnitedHealth warns it could leave exchanges

Published 11/19/2015, 04:21 PM
Updated 11/19/2015, 04:39 PM
The Dow, NASDAQ and S&P 500 all closed slightly down on Thursday

The Dow, NASDAQ and S&P 500 all closed slightly down on Thursday

Investing.com -- U.S. stocks fell slightly on Thursday as a sell-off in the health care sector triggered by market-moving comments from UnitedHealth Group (N:UNH), offset gains in the technology and consumer industries ahead of next week's start to the holiday shopping season.

On Thursday morning, United Health Group rattled markets with stark warnings that it could leave the public insurance exchanges created by U.S. president Barack Obama's comprehensive health care plan as early as 2017. The nation's largest health care company said it will evaluate whether it can continue serving the public exchanges in 2017 over the first half of next year over mounting concerns that its business in the segment is "deteriorating." After initially showing some reluctance to join the exchanges last year, United Health expanded coverage to 24 states in 2015, covering more than a half million Americans.

The Dow Jones Industrial Average fell 4.41 or 0.02% to 17,732.75, while the NASDAQ Composite index dipped 1.56 or 0.03% to 5,073.64 on a choppy day of trading. The S&P 500 Composite index, meanwhile, lost 2.34 or 0.11% to 2,081.24, as six of 10 sectors closed in the green. Stocks in the Utilities, Consumer Goods and Technology sectors led, while stocks in the Health Care and Energy industries lagged.

Following the announcement, shares in United Health, the worst performer on the Dow, fell 6.62 or 5.65% to close at 110.63. The comments sent shockwaves reverberating throughout the industry as a host of major insurers saw their shares fall sharply in Thursday's session. Shares in Aetna Inc (N:AET) Anthem Inc (N:ANTM) and Cigna Corporation (N:CI), three of United Health Group's major competitors, also fell by more than 5% on the day.

The top performer was Intel Corporation (O:INTC), which surged 1.14 or 3.44% to 34.30 after the Silicon Valley chipmaker improved its forward guidance for 2016 and raised its quarterly dividend on Thursday. Intel (O:INTC) expects its annual revenue growth to be in the mid-single digits next year, allowing it to expand capital spending on memory products.

The biggest gainer on the NASDAQ was Keurig Green Mountain Inc (O:GMCR), which soared 7.38 or 18.22% to 47.88 after the coffeemaker reported lower than expected per share earnings declines last quarter. Before Keurig's two-day rally, shares in the Vermont-based company had slumped nearly two-thirds over the last 12 months. The worst performer was Biomarin Pharmaceutical Inc (O:BMRN), which fell 4.59 or 4.26% to 103.11. Biomarin shares fell on Thursday ahead of next week's FDA panel review of Drisapersen, its drug aimed at helping treat Duchenne Muscular Dystrophy. Keurig Green Mountain (O:GMCR) was also the top performer on the S&P 500, just ahead of SJM, which jumped 7.90 or 6.97% to close at 121.28. The worst performer was CHK, which fell 0.60 or 10% to 5.40, amid minor losses in U.S. crude futures in Thursday's session.

Shares in Square (N:SQ) closed above $13 a share, soaring more than 45% on its first day as a publicly traded stock. Square, the payment company headed by Twitter (N:TWTR) co-founder Jack Dorsey, made its IPO at an underwhelming $9 a share. With a market capitalization of approximately $4.4 billion, Square's valuation fell short of high end of private investors' expectations of $6 billion.

On the New York Stock Exchange, advancing issues outnumbered declining ones by a 1,601 to 1,469 margin.

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