Stocks Tumble at News of Obamacare Ruling
Jun 28, 2012 No Comments ›› Toro520
Excerpted from CNBC:
Stocks held their sharp losses across the board Thursday after the U.S. Supreme Court upheld a key part of President Obama’s health care overhaul.
Stocks had opened lower amid skepticism that European leaders would be able to form a solution to tackle the ongoing debt crisis.
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Experts were mixed on the announcement.
“The follow-through from this in the next few days and weeks is that more money will come into health care now that the cloud of uncertainty has been lifted,” said Credit Suisse’s Charles Boorady. “And as a country, we’re going to spend about $2 trillion more on health care with this law and that’s all money coming into health care, which will ultimately be good for the managed health care stocks.”
Meanwhile, Barry Knapp of Barclays said public policy uncertainty will continue to rise, putting further damper on business confidence.
“It’s a pretty clear negative,” said Knapp. “Markets were going down anyway and this is just going to be a pretty clear negative catalyst over the next or two as opposed to something to stop the bleeding.”
Adding to negative market sentiment, European leaders meet in Brussels for the two-day summit, with German Chancellor Angela Merkel already stating they must concentrate on fundamental reforms rather than emergency proposals put forward by Italy and Spain to help alleviate their cost of borrowing on the markets. European shares were trading lower in volatile trading.
Merkel has also refused to discuss the issue of debt burden sharing unless national budget controls across the euro zone are introduced first.
Meanwhile, a spokesman for German Finance Minister Wolfgang Schaeuble said that a report that Germany could be willing to move sooner than expected to accept shared liability of euro zone debt was not true.
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