HMOs' Unwelcome Diagnosis

WellPoint's profit warning, which zapped $10 billion from its market cap due to rising medical costs, has Wall Street turning against the sector
Angela Braly, president and CEO of WellPoint. wellpoint.com

One sector that had been touted as a refuge while the broader stock market works through its funk—health insurance—hit investors with a bombshell on Mar. 10. WellPoint (WLP) cut its earnings outlook, causing some analysts to worry that other health insurance providers may have underestimated health-care costs, which could lead to lower profits for the entire group.

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