Stocks opened deep in negative territory and as the Dow added triple digit losses to Friday's move lower it put itself into position for its worst monthly performance since August 2015. During the second hour of trading the market reversed and clawed its way back. While the Nasdaq is just above the flatline at midday, the Dow and S&P remain slighlty lower.
ECONOMIC EVENTS: In the U.S., the Empire Manufacturing report had a reading of 10.6, versus the estimate of 20.0. The NAHB housing market index fell 4 points to 56 in December, which was weaker than forecast.
COMPANY NEWS: Shares of several healthcare and hospital stocks have been weak this morning after a federal judge in Texas on Friday ruled that the Affordable Care Act, also known as Obamacare, was unconstitutional based on its mandate requiring that people buy health insurance. JPMorgan analyst Gary Taylor told investors in a research note that Centene (CNC) and Molina (MOH) could bear most of the selloff in managed care given the companies' exposure to Medicaid and Obamacare markets. Both insurers have a total ACA exposure of more than 40% of EPS, followed by WellCare (WCG) at 10%, he said.
Goldman Sachs (GS) shares have slipped 1% after reports that Malaysia's attorney general filed criminal charges against Goldman Sachs International, two Asian subsidiaries, and a former Goldman partner for alleged misappropriation of $2.7B from the firm's 1MDB fund.
MAJOR MOVERS: Among the noteworthy gainers was Jack in the Box (JACK), which rose 3% after the company announced that its board and management team are exploring a range of strategic and financing alternatives, including a potential sale of the company or executing on the company's previously announced plans to increase its leverage. Also higher was Proteostasis Therapeutics (PTI), which gained 5% after announcing a worldwide, exclusive license agreement with Roche (RHHBY) unit Genentech for rights to potential therapeutic small molecule modulators of an undisclosed target within the proteostasis network.
Among the notable losers was Sophiris Bio (SPHS), which fell 41% after reporting that additional benefit was not observed on targeted biopsy six months after re-treatment with a second administration in its Phase 2b study of topsalysin for localized prostate cancer. Also lower was Acadia Healthcare (ACHC), which declined 5% after the company announced that Debbie Osteen, former President of the Behavioral Health Division of Universal Health Services (UHS), has joined as CEO to replace Joey Jacobs, who has been removed by the board from his roles as CEO and chairman of the board.
INDEXES: Near midday, the Dow was down 72.35, or 0.30%, to 24,028.16, the Nasdaq was up 4.14, or 0.06%, to 6,914.81, and the S&P 500 was down 5.76, or 0.22%, to 2,594.19.
