UnitedHealth Group Inc. and Humana Inc. slid at least 12.8 percent and Eli Lilly & Co. lost 4.7 percent on concern Obama will cut Medicare payments to insurers and raise rebates drugmakers must provide to patients on Medicaid. SLM Corp., known as Sallie Mae, tumbled 31 percent as the president proposed ending its student loan subsidies. JPMorgan Chase & Co. and Wells Fargo & Co. gained more than 6 percent as Obama’s budget proposed as much as $750 billion in new bailout funds.
The Standard & Poor’s 500 Index decreased 1.6 percent to 752.83 after rising as much as 1.9 percent in early trading. The Dow Jones Industrial Average lost 88.81 points, or 1.2 percent, to 7,182.08. The Russell 2000 Index fell 2.1 percent. Two stocks dropped for each that rose on the New York Stock Exchange.
Benchmark indexes fluctuated between gains and losses throughout the afternoon as the decline in health-care stocks was offset by gains in banks. The market turned lower in the final 80 minutes of trading as financial shares pared their advance after the Federal Deposit Insurance Corp. said the banking industry posted a collective loss in the fourth quarter for the first time in 18 years.
The S&P 500 has dropped 17 percent so far this year following a 38 percent tumble in 2008, its worst year since the Great Depression.