Reuters: US Dollar Report: GLOBAL MARKETS-US stocks fall on healthcare rule, euro slips

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GLOBAL MARKETS-US stocks fall on healthcare rule, euro slips Jun 28th 2012, 15:46 Thu Jun 28, 2012 11:46am EDT * U.S. healthcare sector weakens after top court decision * JPMorgan, Barclays lead world bank shares lower * Euro falls to three-week lows on low EU summit hopes * Data raise worries about U.S. economy losing momentum By Richard Leong NEW YORK, June 28 (Reuters) - U.S. stocks fell on Thursday after the U.S. Supreme Court upheld the Obama administration's healthcare overhaul law, while the euro hit a three-week low as divisions among European leaders at a meeting in Brussels further diminished hopes of urgent measures to tackle the region's debt crisis. The court upheld the centerpiece of President Barack Obama's healthcare reform law that requires most Americans to get insurance by 2014 or pay a fine. Republican leaders and other opponents who claim the law is too costly and an over-reach of government power vowed to repeal it. U.S. healthcare sector stocks were generally weaker after the ruling, with stocks that stand to benefit from more government business rallied. Investors also turned more cautious after data showed the U.S. economy is losing momentum, while Germany's unemployment rose in June, posing a risk for global growth. Financial shares took a beating on a report that JPMorgan's losses on recent botched trades could reach $9 billion, and British bank Barclays plc paid record fines in a probe of its manipulation of interbank loan rates. Analysts said that with the market so focused on the outcome of the European summit, trade in stocks and the euro would remain choppy, driven by headlines from the meeting. "It's rare that we've seen this amount of discord going into a summit," said Chris Turner, head of foreign exchange strategy at ING. "On the face of it, it looks like it's going to be reasonably negative for the euro." The European Union leaders meeting on Thursday and Friday is expected to produce a broad roadmap for fiscal, financial and political union across the 17-nation currency bloc. Some agreement on measures to boost growth may emerge, but German Chancellor Angela Merkel has brushed aside demands from Italy and Spain for rapid action to lower their soaring borrowing costs. She also poured cold water on proposals backed by France for euro zone countries to assume joint liability for each other's debts. Doubts over significant progress toward a crisis solution at the meeting pushed yields on 10-year Spanish bonds above 7 percent and 10-year Italian debt to 6.25 percent. These are seen as unsustainable borrowing costs for the euro zone's third- and fourth-biggest economies. Wall Street's three major indexes were around 1 percent lower, led by losses in the banking and healthcare sectors. In late morning trade, the Dow Jones industrial average was down 122.61 points, or 0.97 percent, at 12,504.40. The Standard & Poor's 500 Index was down 12.12 points, or 0.91 percent, at 1,319.73. The Nasdaq Composite Index was down 40.73 points, or 1.42 percent, at 2,834.59. The S&P healthcare index was down 1.2 percent, while the Morgan Stanley healthcare payor index was down 1.0 percent after the high court narrowly upheld the landmark law that requires most Americans to buy healthcare insurance. Shares of large health insurers fell, with Wellpoint down 6.3 percent at $65.05, while Centene Corp and Molina Healthcare, which specialize in Medicaid programs for the poor, rose 2.0 percent and 4.1 percent, respectively. JPMorgan shares were down $1.42, or 3.9 percent, at $35.33 after the New York Times, citing people briefed on the situation, reported losses from a soured credit derivative trade could be as much as $9 billion after the U.S. bank said in May it had lost $2 billion on the trade. The FTSEurofirst 300 index of top European company shares was down 0.95 percent at 990.59 points. The STOXX European banking index was down 3.16 percent. Barclays stock shed 16.8 percent at 163.10 pence after the bank agreed to pay a $453 million fine for manipulating interest rates on the London interbank market. MSCI's world equity index fell 0.85 percent to 1,191.51, ending two days of gains. The euro fell 0.33 percent to $1.2428 after touching a three-week low versus the dollar at $1.2405. The dollar index was up 0.19 percent at 82.769 after touching its highest level in about 1-1/2 weeks. The move to lower-risk investments fed bids for U.S. Treasuries and German Bunds. Benchmark 10-year Treasury notes were up 13/32 in price to yield 1.57 percent, down nearly 5 basis points, while Bund futures were up 0.45 percent at 141.73. Anxiety about slowing global growth and the outcome of the EU summit stoked selling in oil and other commodities. Gold fell more than 1 percent to its lowest level since June 1 at $1,549.99 an ounce. It last traded at $1,553.96. Brent crude futures in London fell $1.48, or 1.58 percent, to $92.03 a barrel, while U.S. oil futures dropped $1.74, or 2.17 percent, at $79.47 a barrel. Link this Share this Digg this Email Reprints

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