3 Dow Losers Today

The Dow Jones Industrials Average (DJINDICES: ^DJI  ) drifted up another nearly 0.2% today, on top of yesterday's 0.8% gain, as speculation continues to heat up among Fed-watchers over the pace of the Fed's eventual withdrawal of its economic recovery efforts.

The Fed's Open Market Committee began meeting today to discuss whether to decrease the rate of its bond purchases, currently set at $85 billion per month, that have been helping to lower long-term interest rates. It's expected to keep the rate the same for now, or perhaps reduce the rate slightly. The outcome of the meeting, which will be announced tomorrow at 2 pm and has been the subject of months of speculation, shouldn't actually matter that much to long-term investors. It is possible, however, that the Fed could inadvertently drive up interest rates, and risk impeding the economic recovery if it signals an intention to remove its stimulus sooner than many expect.

Probably of more importance than today's meeting, Larry Summers withdrew his name from the running for Fed Chair over the weekend. Summers, who helped plan the response to the financial crisis as Director of the White House's National Economic Council from 2009 to 2010, was speculated by many to be the White House's most likely choice to succeed Ben Bernanke in 2014. But, ultimately, Summers pulled out after drawing opposition from Senate Democrats for his role in deregulating Wall Street during the late 1990s.

That makes Fed Vice Chair Janet Yellen the presumptive frontrunner. Yellen, the Fed's most accurate forecaster, is known to favor continuing the Fed's efforts to lower unemployment, and boost economic growth longer than many others at the Fed.

Despite all that, a few Dow stocks failed to join in on today's rally. Dow health-care components UnitedHealth Group (NYSE: UNH  ) , Merck (NYSE: MRK  ) , and Pfizer (NYSE: PFE  ) all ticked down slightly. It may be tempting to search for explanations, but you can't really conclude much, because health-care stocks in the broader market actually rose today.

Nevertheless, investors are still trying to grapple with how the Affordable Care Act will affect various health-care industries. For instance, health insurers will need to spend at least 80% of premiums on patients, and will no longer be able to deny customers due to preexisting conditions, but they will get access to a slew of new younger, healthier customers. State health insurance exchanges go live January 2014, and insurers are jockeying for how best to position themselves. Similarly, branded drugmakers will have to pay excise taxes, but expanded health coverage for more Americans could bring them more business.

Pfizer and Merck, though, are up 14% and 17%, respectively, so far this year, while UnitedHealth Group, up 37%, has rallied along with other managed-care companies.

More stock ideas
Obamacare is rewriting the rules for the health-care industry, and in the process of doing so, it's creating massive opportunities for investors to get ridiculously rich. How? By investing in a handful of specific health care stocks. In this free report, our analysts walk you through these opportunities and the companies that are positioned to exploit them. The informational edge contained in it is invaluable, but can only be exploited profitably while the rest of the market remains in the dark. To access this free report instantly, simply click here now.


Read/Post Comments (0) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2642337, ~/Articles/ArticleHandler.aspx, 4/18/2014 10:50:04 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 2.54 0.14%
NASD 4,095.52 0.00 0.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

4/17/2014 4:31 PM
^DJI $16408.54 Down -16.31 -0.10%
DOW JONES INDUSTRI… CAPS Rating: No stars
MRK $56.47 Up +0.21 +0.37%
Merck & Co., Inc. CAPS Rating: ***
PFE $30.25 Up +0.16 +0.53%
Pfizer CAPS Rating: ****
UNH $75.78 Down -2.41 -3.08%
UnitedHealth Group CAPS Rating: ****

Advertisement