Stocks Slide as Humana Surges on Lower Medicare Rates

NEW YORK ( TheStreet) -- Soft manufacturing data sank major U.S. equity indices on Monday even as Humana ( HUM) rose before a federal agency reported closely-watched Medicare rates.

The S&P 500 dropped 0.45%, to 1,562.17 points.

Humana shares closed higher by 8.6% at $75.02 before the Centers for Medicare & Medicaid Services announced that costs per person would be lower in 2014 than in 2013.

Following Thursday's record close, investors appeared to be looking for an excuse to take profits, and less-than-expected data on U.S. manufacturing provided the justification.

The Institute for Supply Management said its manufacturing index for March was 51.3, trailing the 54.2 consensus expectation among economists surveyed by Thomson Reuters. A number higher than 50 suggests that the sector is growing whereas a number lower than the threshold reflects contraction. Last month's report showed a 1.1 point increase to 54.2.

"Right now I think everyone is anticipating the spring slide, and so everyone is looking for some kind of data to indicate which way the teeter-totter is going to tip," said Frank Fantozzi, CEO of Planned Financial Services.

U.S. Steel lost 4% to fall to its lowest in almost seven months as the company absorbed the effects of the latest manufacturing report. The Dow Jones Industrial Average was off 0.04%, at 14,572.85 on Monday. The Nasdaq dropped 0.87% to 3,239.17.

Tesla Motors ( TSLA) was one of the top performers on the Nasdaq on Monday after the company announced that its electric sedan sales exceeded guidance and expected to show a profit in the first quarter. Shares jumped 16% to $43.93.

Elsewhere in the market Hess ( HES) shares popped 2.7% to $73.54 after the energy company announced it had agreed to sell its Russian subsidiary, Samara-Nafta, to OAO Lukoil for $2.05 billion.

Molson Coors ( TAP) shares jumped 6.1% to $51.90 after Goldman Sachs ( GS) raised the stock to a buy rating from neutral.

Analog Devices ( ADI) shares slipped 2.3% to $45.41 after the company announced CEO Jerald Fishman, 67, died of an apparent heart attack on Thursday. The chipmaker announced that it had appointed President Vincent Roche as interim chief.

The S&P on Thursday reached an all-time high, trumping its former record reached on Oct. 9, 2007. Investors shrugged-off concerns that Cyprus's financial problems would exacerbate Europe's wider banking debt crisis. The new high for the U.S. benchmark came five years after a mortgage-backed security crisis sent the world's largest economy into its worst recession in more than 70 years. Markets were closed on Friday in observance of Good Friday.

Asian markets closed lower overnight as Chinese manufacturing PMI printed slightly below economists' expectations, but still maintained a trajectory of growth. Japan's Nikkei average closed down by 2.12% overnight at 12,135. Hong Kong's Hang Seng slid 0.74% to 22,300.

European markets on Monday are closed in observance of Easter.

Futures for May crude oil contracts at the New York Mercantile Exchange lost 16 cents to settle at $97.07 a barrel.

The benchmark 10-year Treasury was increasing 5/32, diluting the yield to 1.838%. The dollar was sinking 0.33%, according to the U.S. dollar index.

-- Written by Joe Deaux in New York.

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