NEW YORK (AP) — When the stock market began tumbling Thursday, many people assumed the selloff had something to do with the Supreme Court ruling to uphold President Barack Obama's health care law. But for a lot of investors, it was the same old concerns about Europe, along with a few new worries.
The market fell sharply in early trading, before the high court's announcement, as investors questioned whether a European Union meeting in Brussels would yield the same results as many meetings before it — vague pledges, rather than concrete plans for what to do with struggling countries like Greece and Spain.
Bank stocks also declined, in part because of a report that a trading loss at JPMorgan Chase first estimated at $2 billion could be as much as $9 billion.
U.S. stocks still closed lower for the day, but they bounced back in the last half-hour of trading. The Dow Jones industrial average closed down nearly 25 points, after falling as much as 177.
There were varying explanations for the late comeback, but most seemed to focus on Europe, including rumors that the European Central Bank would cut interest rates and that EU leaders might actually emerge from this week's meetings with a plan. Late Thursday, a top EU official said leaders had agreed to devote $149 billion to "immediate growth measures."
Nicholas Colas, ConvergEx Group chief market strategist, said blaming the health care ruling for the market's losses was "a convenient excuse."
"No doubt that the court's decision was disappointing," he said, "but I really think the indecisiveness of European policy makers at the nth summit on the same topic is the cause of the decline."
Other traders had similarly low expectations.
"The first one thousand summits, I was pretty excited," deadpanned Jeff Sica, president and chief investment officer of SICA Wealth Management in Morristown, N.J.
In the U.S., the Dow Jones industrial average was down about 100 points around 10 a.m., just before the Supreme Court ruled. Then it fell more steeply but recovered most of those losses, ending down 24.75 points at 12,602.26.
The Standard & Poor's 500 index dropped 2.81 points to end at 1,329.04 and the Nasdaq composite fell 25.83 points to 2,849.49. Both indexes bounced back from bigger losses.
There was disappointment to be found in almost all corners of the market. The Commerce Department said the American economy expanded at a 1.9 percent annual rate in the first quarter, a weak pace that isn't expected to pick up. Family Dollar fell after reporting that it missed analysts' profit estimates.
David Lefkowitz, senior equity strategist at UBS wealth management research in New York, was immune to the media frenzy around the Supreme Court ruling. He watched for news out of Europe because, he said, "There's not much else going on." Health insurance companies make up only about 1 percent of the Standard & Poor's 500, he said.
Some critics of the new health care law say it will hurt small businesses by requiring more of them to provide insurance for employees.
Piling that extra cost on businesses is "not a way to get people off the fence to hire people," said Rick Fier, vice president of stock trading at Conifer Securities in New York.
Lefkowitz disagreed. The Supreme Court was never considering whether to strike down the provision affecting employers, but only the mandate requiring individuals to buy insurance. So businesses should have already been expecting to take on the extra costs, he said. (However, if the Supreme Court had rejected the individual mandate, that could have eventually led to getting rid of the employer mandate as well.)
Paul Zemsky, head of asset allocation at ING Investment Management in New York, thought the Supreme Court ruling was affecting the market, but indirectly. The ruling, he said, crystallizes the federal government's polarization ahead of the election.
Republicans, who will feel ripped off, and Democrats, who will feel vindicated, are now less likely to agree on how to solve looming complications like tax increases and spending cuts that are supposed to take effect in January. "This doesn't make me feel like the spirit of compromise will be in the air," Zemsky said.
Though health care stocks fell overall, the companies had disparate reactions to the ruling. Insurers WellPoint and Aetna fell. Hospitals such as HCA Holdings and Community Health Systems rose.
When all of the new health care requirements kick in, insurers will have more customers, but they'll also be subject to more taxes and regulations. They'll also have to take on less-profitable customers, such as patients who are already sick.
But hospital emergency rooms, which have to treat patients regardless of whether they're insured, are more likely to get paid if almost everyone they treat has insurance. Having insurance will also spur more people who might have otherwise put it off to seek medical treatment.
"Insured people have more purchasing power, and they'll buy whatever you make, whether you're a supplier of drugs or devices," said Gerard Wedig, a health care economist at the University of Rochester.
U.S.-listed shares of Barclays, the British bank, plunged 12 percent. A day earlier, the bank had agreed to settle charges with U.S. and U.K. regulators who accused it of manipulating key international interest rates.
New York-based bank JPMorgan Chase fell 2.5 percent, more than any other company in the Dow index, after the New York Times reported that a trading loss there first estimated at $2 billion could eventually reach $9 billion.