Health-care stocks keep getting hammered — Wall Street says this is why

Shares of health-care services companies took another beating Wednesday, as the evolving political climate on health care, including calls for lower drug prices and “Medicare for All” plans, continued to weigh heavily on Wall Street sentiment.

Four of the Dow Jones Industrial Average’s DJIA, -0.03%   10 biggest losers on Wednesday were health companies, including UnitedHealth Group Inc. UNH, -2.78%  , Merck & Co. MRK, -3.91%  , Pfizer Inc. PFE, -3.57%  and Walgreens Boots Alliance Inc. WBA, -0.36%  

The SPDR Health Care Select Sector exchange-traded fund XLV, -3.10%  slumped 2.6% toward a 3-month low, after dropping 2.1% on Tuesday. It was the only SPDR ETF tracking the S&P 500’s 11 sectors that was losing ground year to date. In comparison, the S&P 500 index SPX, -0.21%   has climbed 16% this year.

Wednesday’s selloff was led by medical-care services company DaVita Inc. DVA, -7.66% insurer Anthem Inc. ANTM, -7.07%   and drug company Alexion Pharmaceuticals Inc. ALXN, -8.36%  

Health companies have been grappling with investors’ reactions to possible changes to the health-policy landscape. Facing political pressure over hefty drug prices and, most recently, a new proposal from U.S. Sen. Bernie Sanders suggesting a single-payer system, investors are becoming increasingly skittish around an industry once considered a safe haven.

Read: What ‘Medicare for All’ would do to the health-care sector

Don’t miss: Sanders’ ‘Medicare for All’ gets cheers at Fox News town hall

FactSet, MarketWatch

“Volatility picks up for health-care stocks around election cycles as sentiment moves around in reaction to different candidates’ plans for changing the health-care sector, especially since health-care benefits have been the key topic for voters since 2007,” Brian Tanquilut of Jefferies wrote in a note to clients on Wednesday.

Health insurers like Anthem and peers UnitedHealth, Humana Inc. and Cigna Corp. CI, -5.14%

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