Stocks storm back after health care decision

Updated: 6:51 p.m. ET

The Supreme Court shocked the nation by upholding President Obama's health care legislation today, ensuring that health care will be a major issue in this fall's elections.

Stocks were lower in the aftermath, with health insurance stocks among the big losers, but rebounded strongly in the last hour of trading after German Chancellor Angela Merkel canceled a press briefing at the European Union summit in Brussels. The speculation is serious talks are going on about a solution to Europe's debt crisis.

The European development came after the Supreme Court, in a 5-to-4 decision Chief Justice John Roberts, ruled that the law's individual mandates -- which require Americans who aren't covered by insurance at work to buy insurance or face a fine -- was justifiable if one assumed the fine was a tax. That was good enough to get the law past the argument that the mandate was an unconstitutional expansion of federal power.

The decision was greeted with joy by supporters of the legislation. Republicans -- including presidential candidate Mitt Romney -- vowed to try to repeal the law as soon as possible.

Thanks to the news from Europe, the Dow Jones industrials ($INDU) closed down 25 points to 12,602 after dropping as many as 177 points. The Standard & Poor's 500 Index ($INX) fell 3 points to 1,329. The Nasdaq Composite Index ($COMPX) was off 26 points to 2,849.

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The Nasdaq-100 Index ($NDX) was off 29 points to 2,537. Apple (AAPL), the biggest influence on the index, was down $5.45 to $569.05, contributing five points to the index's loss. Microsoft's (MSFT) loss of 26 cents to $29.91 cost the index about two points. (Microsoft publishes MSN Money.)

The rebound ensured that the four indexes ended the day higher for June with one day of trading remaining.

RIMM shares are staggered by miserable quarter
Research In Motion (RIMM) shares were off a shocking 17.6% after hours to $7.52 after the company reported a fiscal-first-quarter​ loss of 37 cents a share -- 36 cents worse than expected. Revenue fell 43% to $2.8 billion and missed Street estimates by $300 million. Shares halted after hours at $9.

Worse, its BlackBerry 10 device won't be released until the first quarter of calendar 2013.

The shares had closed off 5 cents to $9.13 in regular trading.

BlackBerry sales were down to 7.8 million units from 11.4 million units a year ago. The company will lay off 5,000 workers by the end of the fiscal year -- a third of its workforce.

Nike results disappoint
After the close, shares of athletic-equipment-a​nd-apparel maker Nike (NKE) were down 10.4% to $86.83 after fiscal-fourth-quarte​r earnings of $1.17 a share missed the Street estimate of $1.24. Revenue was up 12% to $6.5 billion.

The company attributed the miss to lower gross margins, higher sales, general and administrative spending, an increase in its effective tax rate and a charge related to restructuring Nike Brand Western Europe's operations.

The company's Nike brand futures orders were up 7% -- 12% excluding currency changes.

A down day on Friday?
Futures trading suggests that stocks will be pressured on Friday. The health-care decision will continue to have an emotional effect on the markets.

Leaders of the European Union will finish their summit. There's talk about Germany is coming around to supporting the idea of European-wide bond issues to help Italy and Spain.

Earnings are scheduled for Constellation Brands (STZ) and KB Home (KBH). The latest Chicago Purchasing Managers Index and the University of Michigan Consumer Sentiment Index reports are due.

It's also the last day of the quarter.

Energy prices -- New York close
			Thur.			Wed.			Month chg.			YTD chg.
Crude oil (-CL)			$77.69			$80.21			-10.22%			-21.39%
(per barrel)
Heating oil (-HO)			$2.5472			$2.5902			-5.77%			-12.59%
(per gallon)
Natural gas (-NG)			$2.722			$2.798			12.39%			-8.93%
(per mil. BTU)
Unleaded gasoline (-RB)			$2.4773			$2.4989			-9.01%			-6.78%
(per gallon)
Brent crude			$91.36			$93.50			-10.32%			-14.92%
(per barrel)
Retail gasoline			$3.3690			$3.3830			-6.93%			2.84%
(per gallon; AAA)

Crude oil moves lower
Crude oil (-CL) settled down $2.52 to $77.69 a barrel. Brent crude was off $1.79 to $91.71.

The national average for regular unleaded gasoline fell to $3.369 from $3.383 on Wednesday, according to AAA's Daily Fuel Gauge Report. The price is down 14.5% from the $3.936-a-gallon peak in early April but still up 2.8% for the year.

Gold (-GC) fell $28 to $1,550.40 an ounce. Silver (-SI) fell 69.5 cents to $26.25 an ounce. Copper (-HG) was off 2.35 cents to $3.326 a pound.

Corn (-ZC) slipped to $6.3075 a bushel as drought worries eased.

Interest rates were lower, with the 10-year Treasury yield falling to 1.577% from 1.621% on Wednesday. The dollar was lower against major currencies.

Health stocks drop, then climb back, after court decision
Health-insurance stocks suffered the biggest losses after the Supreme Court decision but rebounded at the close. UnitedHealth (UNH) closed up 31 cents to $59.60 after falling to as low as $55.34. But Aetna (AET) dipped $1.11 to $39.85 after falling to $38.85.

Medical-equipment makers also rebounded, even though their sales are now subject to a 2.3% tax. So, St. Jude Medical (STJ) closed up 13 cents to $38.77. Boston Scientific (BSX) dropped 9 cents to $5.55 after falling to $5.48.

Hospital operators were mostly higher because the law would expand Medicaid coverage and help them finance care for patients who have lacked insurance coverage. HCA Holdings (HCA) jumped $2.86 to $29.47. Tenet Health Care (THC) climbed 27 cents to $5.25.

The Health Care Select SPDR (XLV) exchange-traded fund, which tracks the 52 stocks in the S&P 500's health care sector, was down 17 cents to $37.30 after falling to as low as $36.92.

The health care debate is hardly over
Passed in 2010, the law is intended to end the United States’ status as the only rich country with large numbers of uninsured people, by expanding both the private market and Medicaid.

In all, The New York Times said, tens of millions of people are expected to gain insurance from the law, as part of a march toward universal coverage, a goal that has eluded legislators and presidents -- including Franklin D. Roosevelt, Harry Truman, Lyndon Johnson, Richard Nixon and Bill Clinton -- for generations.

The decision does not mean an end to the debate over health care. For one thing, much of the law doesn't take effect until 2014.

 Republicans will attempt to kill the law, favoring a system built around tax credits and what it says are market-based solutions, arguing that competition will keep health care costs in check. The House of Representatives has scheduled a July 11 vote to repeal the law, but Democrats control the Senate and President Obama would veto it

Many businesses opposed the legislation believe it will add to their costs.

Small businesses opposed it because it requires them to provide insurance once employment reaches 50 workers. Many said today they would hold total employment at 49.

The one area where opponents won was the court's decision that the government could not withhold all of a state's Medicaid funding if it refuses to expand its Medicaid coverage. It can, however, withdraw new funding.

The limits of the Commerce Clause
There was one subtly important piece to the health care decision, Tom Scocca noted on Slate. Chief Justice Roberts' opinion rejected the use of the Commerce Clause of the U.S. Constitution to justify the health care law. The penalties that go with the individual mandate are effectively a tax.

The distinction is important because the Commerce Clause has been the key that enabled much social legislation since the 1930s. Roberts' opinion would limit that ability.

Europe and economy weigh on markets
U.S. jobless claims fell to 386,000 from a revised 392,000 a week ago. The original estimate had been 387,00. Thus, the improvement was negligible.

A third estimate of U.S. economic growth as measured by gross domestic product showed the economy growing at an annualized 1.9% in the first quarter, unchanged from the second estimate of growth. Most analysts see the economy growing at these levels for some time.

Until reports came out that a deal might be in the offing, there was deep skepticism that a two-day European Union summit would yield tangible results. Stocks in Germany, the United Kingdom and France were down sharply.

U.S. financial stocks ended lower. The catalyst was a sell-off in shares of JPMorgan Chase (JPM) after The New York Times said the trading losses announced in May may be as much as $9 billion, far more than the banking giant’s initial $2 billion estimate. JPMorgan countered that $4 billion to $6 billion is more likely. The stock were fell 90 cents to $35.88 and was the worst performer among the 30 Dow stocks.

Bank of America (BAC) and Citigroup (C) fell 3 cents to $7.74 and 71 cents to $26.39, respectively.

British bank Barclay's (BCS) tumbled $1.49 to $10.84 in New York after agreeing to pay $450 million to settle charges it had conspired with some 20 others -- all big, global institutions -- to manipulate the London Interbank Offering Rate, one of the world's key measures of the cost of credit. The company's U.S.-born CEO Robert Diamond's job may be threatened.

European fears trimmed shares of companies that do much of their business overseas. IBM (IBM) fell $1.60 to $191.40. United Technologies (UTX) was off $1.56 to $72.60. The declines for the two stocks subtracted 24 points from the Dow by themselves.

There were three winners among the 30 Dow stocks: Chevron (CVX), Kraft Foods (KFT) and AT&T (T).

Amazingly, 265 S&P 500 stocks were higher, led by Genworth Financial (GNW) and Best Buy (BBY), up $1.08 to $20.88. Tenet Health was third. The laggards were health insurer Wellpoint Health Network (WLP) and F5 Networks (FFIV).

Only 14 Nasdaq-100 stocks were higher, led by Micron Technology (MU), up 25 cents to $5.97, and Express Scripts (ESRX), up $1.29 to $54.79. The laggard was Vertex Pharmaceutical (VRTX), down $9.93 to $51.18 as investors were skeptical about the results of a trial of a cystic fibrosis drug.

Short hits from the markets -- New York close
			Thur.			Wed.			Month chg.			YTD chg.
Treasury yields
13-week Treasury bill			0.0800%			0.080%			14.29%			700.00%
5-year Treasury note			0.693%			0.719%			3.28%			-16.51%
10-year Treasury note			1.577%			1.621%			-0.25%			-15.71%
30-year Treasury bond			2.666%			2.693%			-0.22%			-7.72%
Currencies
U.S. Dollar Index			83.007			82.810			-0.15%			3.09%
British pound			1.5526			1.5574			0.73%			-0.08%
(in U.S. $)
U.S. $ in pounds			£0.644			£0.642			-0.72%			0.08%
Euro in dollars			$1.24			$1.25			0.70%			-3.93%
(in U.S. $)
U.S. $ in euros			€ 0.803			€ 0.802			-0.69%			4.09%
U.S. $ in yen			79.62			79.69			1.35%			3.26%
U.S. $ in Chinese			6.38			6.35			-0.03%			0.84%
yuan
Canada dollar			$0.968			$0.976			-0.01%			-1.29%
(in U.S. $)
U.S. dollar			$1.033			$1.025			0.01%			1.31%
(in Canadian $)
Commodities
Gold (-GC)			$1,550.40			$1,578.40			-0.88%			-1.05%
(per troy ounce)
Copper (-HG)			$3.326			$3.395			-1.17%			-3.20%
(per pound)
Silver (-SI)			$26.247			$26.942			-5.44%			-5.98%
(per troy ounce)
Wheat (-ZW)			$7.4600			$7.5125			15.88%			14.29%
(per bushel)
Corn (-ZC)			$6.3225			$6.330			13.87%			-2.20%
(per bushel)
Cotton			$0.6951			0.6796			-2.85%			-24.18%
(per pound)
Coffee			$1.6305			1.6485			0.06%			-29.00%
(per pound)
Crude oil (-CL)			$77.69			$80.21			-10.22%			-21.39%
(per barrel)