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The Rich Get Poorer
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Business New Haven
12/29/1997
By: BNH
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The biggest disappointment came from Aetna (NYSE: AET), which had bottomed out in late October below 70 before slowly climbing back above 80. On December 18, however, news of the resignation of James Dickerson, chief financial officer of Aetna's HMO unit US Healthcare, hit the stock hard.
Aetna dropped 9 5/8 in a single day. The financial and legal troubles of HMO firms like Oxford Health and Columbia HCA have made investors in HMOs extremely nervous and unforgiving of any hint of turmoil. Aetna was also downgraded by numerous brokerage houses on news of Dickerson's resignation.
Cigna (NYSE: CI) has experienced similar troubles throughout December, with the stock on a bumpy downward ride over the
last month.
In response to news of poor results from a new anti-obesity drug (see Business Wire) Neurogen (NASDAQ: NRGN) suffered a sharp drop in share price, falling in a day from its October-November trading range of around 20 to a new share price of 12-13 on heavy volume.
Some smaller Connecticut manufacturers turned in much better performances.
Stable earnings and moderate sales growth helped Echlin (NYSE: ECH) climb 15 percent in the last month. After dipping briefly below 30 in mid-November, the stock broke 36 before retreating slightly to just over 35.
Farrel (Nasdaq: FARL) did even better, climbing nearly 50 percent in a month from 3 1/2 at November's end to over 5 as investors anticipated a positive earnings report.
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