Humana Stock Falls as Medicare Plan Ratings Drop

After wavering for much of the session, major U.S. equities indexes closed out the second trading day of the fourth quarter with minimal gains as investors weighted the implications of a strike by port workers and escalating geopolitical tensions.

The S&P 500, the Nasdaq, and the Dow all eked out gains of less than 0.1% on Wednesday.

Caesars Entertainment (CZR) shares jumped 5.3%, the day’s best performance in the S&P 500, after the casino operator announced a senior note offering and stock buyback. Caesars said it plans to offer $1 billion in senior notes to institutional investors using a private placement. The company also authorized a $500 million share repurchase program following the completion of its previous buyback.

Server and data storage provider Super Micro Computer (SMCI) completed a 10-for-1 stock split after the closing bell on Monday. The split-adjusted shares traded 3.6% higher on Wednesday. The gains for Supermicro follow a steep drop for the stock last week amid reports of the Justice Department launching an investigation into the company’s accounting practices.

Shares of customer relationship management software provider Salesforce (CRM) added 3.2% after Northland Capital Markets upgraded the stock to “outperform.” Analysts pointed to strong opportunities for Agentforce, a platform launched by Salesforce earlier this month that can integrate generative artificial intelligence (AI) technology into sales, service, and marketing processes.

Humana (HUM) shares plunged 11.8%, more than any other S&P 500 stock on Wednesday, after the Centers for Medicare and Medicaid Services (CMS) downgraded a significant percentage of the insurer’s Medicare offerings. The star ratings issued by the CMS could have an impact on Humana’s revenue, as insurers receive bonus payments when they offer higher-rated plans. The company suggested that there could be flaws in the system for determining ratings.

Shares of Conagra Brands (CAG) dropped 8.1% after the food maker reported lower-than-expected sales and profits for its fiscal first quarter. The maker of Healthy Choice frozen meals and Hunt’s ketchup cited a difficult operating environment amid restrained consumer spending. Conagra’s organic organic net sales and gross profit declined from a year ago, while corporate expenses surged more than 150%, driven by increased incentive compensation.

Nike (NKE) reported mixed quarterly results late Tuesday, topping net income forecasts but falling short on revenue. However, the footwear and athletic apparel maker did not offer full-year guidance on its earnings call, and its shares fell 6.8%. Nike is in the midst of a leadership transition, with Elliott Hill set to take over as chief executive officer in mid-October, and the company said the withdrawal of its annual forecasts will give Hill more time in the new role. The sneaker maker also said it would postpone its investor day, which was originally scheduled for Nov. 19.