Posted on: Wednesday, October 20, 2004
Probe of managed care unsettles many traders
By Meg Richards
Associated Press
NEW YORK — Stocks slumped yesterday as oil prices inched back up from earlier lows and an investigation of the insurance industry pressured managed care companies, trumping better-than-expected earnings from International Business Machines Corp. and Texas Instruments Inc.
"Between Spitzer and oil prices, it's taking away from some of the party that we saw earlier with IBM and Texas Instruments, which has helped the Nasdaq hold it together today," said Steven Goldman, chief market strategist for Weeden & Co. in Greenwich, Conn.
Capping the lid on stocks, persistent supply worries and an attack on a key Iraqi pipeline helped oil rebound after a steep decline Monday, and although prices stayed in negative range, they did make up some of their losses. Light, sweet crude for November delivery closed down 38 cents at $53.29 on the New York Mercantile Exchange.
In economic news, the Labor Department reported a modest 0.2 percent rise in September for its Consumer Price Index as lower prices for new cars and airfares helped temper a rise in energy and medical care costs.
Decliners outnumbered advancing issues by about 2 to 1 on the New York Stock Exchange. Consolidated volume came to 2.2 billion shares, compared with 1.93 billion shares traded Monday.
Shares of managed care providers tumbled on newspaper reports that an ongoing probe by the office of New York Attorney General Eliot Spitzer extended to health insurers. Volatile oil prices also prompted investors to sell; although crude retreated for a second session, the market was unnerved by its slow creep back above $53 per barrel.
