Stock exchange traded funds fell Monday following a disappointing manufacturing report, but healthcare ETFs were the worst sector performers after the Centers for Medicare and Medicaid Services announced an 11.1% Medicare reimbursement reduction to skilled nursing facility rates.
“It will certainly have a devastating impact on the industry, and we expect the stocks to see significant selling pressure,” said Oppenheimer analyst Michael Wiederhorn in an Associated Press report.
Skilled nursing facility stocks such as Sun Healthcare Group (NasdaqGS: SUNH), Kindred Healthcare (NYSE: KND) and Skilled Healthcare Group (NYSE: SKH) traded sharply lower.
Health Care Select Sector SPDR Fund (NYSEArca: XLV), Vanguard Health Care ETF (NYSEArca: VHT) and iShares Dow Jones U.S. Health Care (NYSEArca: IYH) all slipped more than 2%.
In the broad stock indexes, iShares S&P 500 (NYSEArca: IVV) fell 1% in midday action Monday. U.S. equities opened higher as a deal reached over the weekend on the debt ceiling boosted sentiment briefly. However, the rally crumbled and the weak manufacturing report raised concerns over the health of the economy. [Poor Manufacturing Report Knocks Stock ETFs]
In other sectors, industrial ETFs were also lagging the market after the Institute for Supply Management said its manufacturing index fell to 50.9 in July from 55.3 the previous month. [Industrial ETFs Fall After Weak Manufacturing Data]
In precious metals, gold and silver ETFs held steady. [Gold, Silver ETFs Pare Gains After Debt Agreement]
The ETF Chart of the Day features a look at AdvisorShares Active Bear ETF (NYSEArca: HDGE), an actively managed fund. [Charting HDGE]
Health Care Select Sector SPDR Fund
