Obamacare's 5 Million Mark Can't Hold Back the Dow's Drop

The Fed's latest minutes sink the Dow in the afternoon despite UnitedHealth's good day.

Mar 19, 2014 at 2:30PM
Daily Fool

Stocks hung flat in quiet trading for most of the day before all three major U.S. indices dropped after the Federal Reserve issued a statement following the end of its latest two-day meeting. As of 2:30 p.m. EDT, the Dow Jones Industrial Average (DJINDICES:^DJI) had fallen by more than 23 points, and most of the Dow's blue-chip member stocks have fallen into the red. Those losses have been offset by UnitedHealth Group (NYSE:UNH), which has soared 2.6% as part of a spirited day from the health insurance industry. Let's catch up on what you need to know.

Obamacare keeps rolling on
The Fed's biggest impact on the market was over interest rates: The central bank announced it would no longer use the unemployment rate as a benchmark for tapering and as a gauge of how the economy's doing, relying instead on a broad set of economic measures. Thirteen of the Fed's policymakers said they saw next year as a likely point to begin raising interest rates again, something the markets haven't taken kindly to after the years of post-recession record low rates.

UnitedHealth's stock shot up as shares from leading insurers across America have enjoyed a big bounce. The Department of Health and Human Services kicked things off by reporting that 5 million Americans have signed up for health insurance under the Affordable Care Act's exchanges since the law launched last October. It's been a strong run-up for Obamacare after a tepid start, and today's new height marks a million-member gain from the end of February.

While the administration still needs another 1 million enrollees in the final two weeks of its initial launch window to reach its revised goal of 6 million -- a tough hurdle to leap, and one that's still below the original White House objective of 7 million sign-ups through the end of March -- the gains have been good news for UnitedHealth and other leading insurers.

More members in the system will help alleviate feared rising costs from the new law, UnitedHealth's medical costs have grown at an equal or faster rate to premium growth in each of the last two years, with the 11% uptick in 2013 matching the company's total revenue growth for the year.

Elsewhere on the markets today, solar power company First Solar (NASDAQ:FSLR) stock has jumped 20%. The company announced full-year guidance today that foresaw 2014 sales coming in at up to $4 billion, a mark that impressed investors. The company also released its quarterly earnings, notching a per-share profit of $0.28 that marked a big swing from last year's $1.30 per-share loss. The company has been skyrocketing over the past year as one of the leaders of the nascent solar power niche, and if First Solar can deliver, investors who bought in early will profit in a big way.

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Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends UnitedHealth Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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