Stock market hiccup: not so much about health-care decision
But some investors still grumbled that the Supreme Court's health-care decision might dampen business confidence and inhibit companies from hiring new workers.
The US Supreme Court’s decision upholding President Obama’s health-care policy caught Wall Street, in addition to others, by surprise. Many investors had expected at least part of the landmark legislation to be thrown out.Skip to next paragraph
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Immediately after the decision was announced, the stock market, which was already in a glum mood because of worries over Europe, sank further. The Dow Jones Industrial Average, which was down about 95 points just before the decision, fell another 50 points. But by the end of the day, the Dow average had regained much of its losses, only falling 24.75 points to close at 12602.26.
Ironically, health-care stocks had a pretty good day. But some investors still grumbled that the Supreme Court decision might dampen business confidence and inhibit companies from hiring new workers.
“The labor market stopped recovering after the Affordable Care Act was passed,” said Barry Knapp, head of US Equity Portfolio Strategy at Barclays Capital in New York, speaking on CNBC. “There has been weak demand for hiring from small business.”
Many felt the decision would result in an even more polarized Congress, which would make the chances of an agreement on the budget less likely before the November elections.
“If the entire thing had been struck down, there would have been room late this year to come to terms on a budget deal,” says Jeffrey Kleintop, chief market strategist at LPL Financial in Boston. “The Democrats would have wanted to reinstate some parts of [health-care reform], and Republicans would have been willing to deal to get the tax cuts extended. There was some room to compromise.”
Nevertheless, Mr. Kleintop notes, the decision established one thing: It would become law for now, and business would have to comply with it.
“There is finally clarity around this,” says Kleintop.