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Healthcare stocks slide after WellPoint cancels rate increase

Los Angeles Times, May 3, 2010

Healthcare stocks dropped as Wall Street feared more bad news ahead for the nation's large insurance companies after insurer WellPoint Inc. abruptly canceled a massive rate increase in California, the Los Angeles Times reports. Investors worried that Indianapolis-based WellPoint's decision to abandon plans for rate hikes as high as 39% amid pressure from state officials could be a sign of things to come elsewhere. "People are thinking, if this is happening in California, it might start happening in other states," said Steven Shubitz, a healthcare analyst with Edward Jones in St. Louis. "If that happens, profit growth could be seriously impacted."