NEW YORK (TheStreet) -- Genworth was the winner among the largest players in the volatile U.S. insurance sector on Thursday with shares rising over 10% to close at $5.43. The major news of the day was the Supreme Court's decision to uphold most of the provisions of the Patient Protection and Affordable Care Act -- signed into law by President Obama in 2010 -- including the individual mandate to carry maintain "minimum essential coverage" or face an IRS penalty, beginning in 2014. The court struck down the provision of the Affordable Care Act that would have forced state governments to expand their Medicaid programs, or risk losing the federal aid they were already receiving for the program. In other important financial news on Thursday, the New York Times reported that JPMorgan Chase may ultimately face hedge trading losses of as much as $9 billion, as the companyâ¿¿s Chief Investment Office works to wind down the trading positions that led CEO James Dimon on May 10 to announce estimated second-quarter hedge trading losses of $2 billion.
The KBW Bank Index declined slightly to close at 44.59, recovering from an earlier dip of 2%, as JPMorgan recovered from an earlier 5% decline to close at $35.88, down 2% for the session.
The KBW Insurance Index rose 0.5% to close at 111.41, with 10 of the 24 index components showing increases.
Genworth -- saddled with a significant mortgage insurance business -- has seen its shares decline 17% year-to-date.
The shares trade for less than four times the consensus 2013 earnings estimate of $1.45 a share, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is 79 cents.
In addition to its life insurance, wealth management and mortgage insurance products and services, Genworth provides long-term care insurance, covering "services provided in the insured's home or in assisted living or nursing facilities."
Bank of America Merrill Lynch analyst Edward A. Spehar has a neutral rating on Genworth, with a price objective of $8.00. The analyst said on Wednesday that his firm was sticking with its estimate that Genworth's mortgage insurance division "will earn $130 million in 2013, or half the level seen before the U.S. housing market collapsed," although "recent developments at Old Republic suggest that there could be sustained pressure on the mortgage insurance market for longer than we have anticipated."
Genworth's long term care business contributed $132 million out of the company's total 2011 pretax operating income of $534 million.
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Among the insurance sector's losers on Thursday was WellPoint , which was down over 5% to close at $65.90. The managed care providerâ¿¿s shares have now returned 6% year-to-date.
Based on a quarterly payout of 28.8 cents, the shares have a dividend yield of 1.75%.
WellPoint trades for eight times the consensus 2013 earnings estimate of $8.54. The consensus 2012 EPS estimate is $7.78.
Leerink Swann analyst Jason Gurda on June 20 downgraded WellPoint to a "Market Perform"' rating from "Outperform" saying the healthcare benefits company's stock was "trading in line with its average P/E multiple over the last five years, despite the uncertainty created by the Court."
The analyst's 12-month valuation range for the shares is $81 to $85, and while Gurda had said a Supreme Court decision to toss the individual mandate would have posed a near-term risk for the shares, the Court's decision to uphold most of the Affordable Care Act -- including the individual mandate -- while throwing out the forced expansion of state Medicaid programs, seems to have surprised most industry observers.
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