President Barack Obama. Photo courtesy of Getty Images.
By Adam Shell, USA TODAY
NEW YORK Stocks that benefit from President Obama's health care law took a beating today on Wall Street in the first trading day after Obama was viewed as the loser in last night's presidential debate against Republican challenger Mitt Romney.
With Romney boosting his stature and making the race for the White House tighter, nervous investors opted to sell hospital stocks that would see their profits hurt if Romney becomes president and repeals Obama's healthcare reform initiative known as The Affordable Care Act.
Most stocks in the hospital sector tumbled between 1.5% and 2.5%.
Tenet Healthcare fell 13 cents, or nearly 2%, to $6.27. HCA Holdings fell dipped 75 cents, or 2.3%, to $32.13. And Healthsouth fell 40 cents, or 1.6%, to $23.70.
The broader market rallied, with the Dow Jones industrial average rising 80.75 points to 13,575.36.
The centerpiece of Obama's plan mandates that uninsured Americans get coverage. And the more insured people means hospitals won't have to eat the costs of treatments given to Americans that show up at emergency rooms and hospitals without insurance.
Romney's strong showing in the debate had health care investors hedging their bets in the event that he upsets the incumbent Obama.
"Under Obamacare there will be a couple of million more paying customers for hospitals which will keep the beds full and increase their profits," says Steven Roge, a portfolio manager at R.W. Roge & Company. "But now that Romney is back in the race and talking about turning back on Obamacare, there is a higher probability of that risk coming to fruition."
Roge says investors should expect more of these knee-jerk reactions to stocks and sectors that will be impacted by who captures the White House in the final 30 days of the election season.