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Jun.18

10:38 PM ET

Wednesday, 18 Jun 2008

Healthcare in Need of Life Support

Posted By:Robert Hum

Topics:Stock Market

After the close today, Coventry Health Care [CVH Loading... () ] slashed its Q2 and full-year earnings guidance due to increasing cost pressures. Coventry’s stock was halted after hours before starting again. Meanwhile, other healthcare stocks are trading sharply lower in after hours trading following the news.

In after hour trading today...
Aetna - 8%
Humana -7%
Wellpoint - 5%
United Health -5%
Cigna -4%

AP
Note that Coventry also lowered its Q1 and full-year guidance back in March (as did some of the other healthcare stocks too) – causing sell-offs in the healthcare stocks. As a result, the healthcare group is already one of the weakest sectors this year. The Morgan Stanley Healthcare Index [.HMO Loading... () ] is one of the worst-performing sectors on the year (-32% YTD). As a comparison, airlines [.XAL Loading... () ] are down 49% YTD and banks [.BKX Loading... () ] are down 29%.

Here is how some of the major healthcare stocks have performed this year (not taking into account the declines after the bell today):

United Health -48%
Humana   -41%
Wellpoint   -41%
Coventry Health -32%
Aetna   -26%
Cigna   -26%

Should be an interesting day tomorrow for these stocks…

bythenumbers.cnbc.com

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