Hospital Stocks Fall After Republicans Gain Control Of Senate

NEW YORK (TheStreet) -- Shares of a number of hospital owners are falling after Republicans last night won control of the U.S. Senate. Republicans have promised to seek to repeal most parts of the Affordable Care Act, which benefits hospitals by reducing the number of uninsured patients that use their services. But in a note to investors today, research firm Leerink Swann wrote that the election results pose more headline risk than fundamental risk to the hospital operators.

WHAT'S NEW: Republicans last night won control of the Senate starting in 2015, meaning that the GOP, which is hostile to President Obama’s healthcare law, will soon have control of both houses of Congress. Hospital stocks are falling after the election results, but Leerink Swann analyst Ana Gupte wrote that the election results are more headline risk than a fundamental problem for the hospital operators. President Obama would have to sign any repeal of the Affordable Care Act, and it would be difficult to eliminate an entitlement already benefiting millions of people, Gupte stated. She recommended that investors buy hospital operators Community Health (CYH) , HCA Holdings (HCA) and Universal Health (UHS) on today's weakness.

PRICE ACTION: In late morning trading, Community Health dropped 2.5% to $51, HCA lost 1.5% to $68, Universal Health gave back 2% to $100, and Tenet (THC) retreated 3% to $51.50.

Reporting by Larry Ramer.

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