Healthcare is worst-performing S&P 500 sector so far this year

Healthcare is the lowest-performing S&P 500 sector so far in 2019, after being the best-performing last year, according to The Wall Street Journal.

Healthcare shares rose 3.8 percent from January through April 12, compared to the broader S&P 500 index’s 16 percent climb. Healthcare stocks were a market leader last summer.

The change is attributed to the threat of stricter regulation, which has negatively affected healthcare shares, according to the WSJ. The publication reports that healthcare shares also are affected by CVS Health and Walgreens earlier this year projecting lower annual earnings due to lower profits from the sale of generic drugs.

“Investors are scared about the massive amount of uncertainty in terms of regulation,” Brock Moseley, founder of Miracle Mile Advisors in Los Angeles, told the WSJ. "There’s a critical eye around the healthcare space and drug pricing. These challenging trends do give us some worry."

Additionally, shares of health insurers UnitedHealth, Humana and Cigna have reportedly dropped this year as discussion of proposed "Medicare for All" legislation continues, and investors worry about regulation of managed-care businesses.

Still, some investors expect the healthcare sector to bounce back in the long term, according to the WSJ. FactSet, a financial data and software company, reported that healthcare companies are projected to post the second-highest profit growth among S&P 500's sectors in the first quarter.

Read the full WSJ report here.


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