* U.S. Supreme Court upholds key part of healthcare reform
* JPMorgan down, NYT says trade loss could reach $9 bln
* German comment adds to skepticism over Europe summit
* Indexes off: Dow 1.3 pct, S&P 1.3 pct, Nasdaq 1.9 pct
By Chuck Mikolajczak
NEW YORK, June 28 (Reuters) - U.S. stocks dropped on
Thursday on concerns about global banks, a surprise Supreme
Court ruling upholding a landmark healthcare law, and pessimism
about the ability of a European summit to ease the region's debt
As EU leaders began the two-day summit, finance officials
were working on urgent measures to diminish financial market
pressure on Spain and Italy, which may be more difficult to bail
out than smaller nations in the euro zone.
Recent statements from German Chancellor Angela Merkel have
been at odds those of other European leaders on how to deal with
"Angela Merkel was very adamant about the fact she isn't
going to give an inch or two - the markets at this point may be
looking at the statement (at the conclusion of the summit) to
see if the actions match her rhetoric," said Fred Dickson, chief
market strategist, D.A. Davidson & Co. Lake Oswego, Oregon.
Wall Street losses accelerated after a divided U.S. Supreme
Court backed the centerpiece of President Barack Obama's
signature healthcare overhaul law that requires that most
Americans to get insurance by 2014 or face a penalty. The
decision surprised many investors who see the law as a hallmark
of a business unfriendly administration.
"The proof in the pudding will come out over the next three
or four days because the Supreme Court ruling, being ninety
pages long, probably will require some in depth interpretation,"
The Dow Jones industrial average fell 167.26 points,
or 1.32 percent, to 12,459.75. The Standard & Poor's 500 Index
lost 17.83 points, or 1.34 percent, to 1,314.02. The
Nasdaq Composite Index dropped 55.57 points, or 1.93
percent, to 2,819.75.
The Morgan Stanley healthcare payor index added 0.6
percent, oscillating between gains and losses in the wake of the
ruling. Larger insurers such as Aetna Inc, which face
more regulation, lost ground while those reliant on Medicaid
such as Wellcare Health Plans Inc rose as their rolls
are expected to increase.
Aetna lost 3 percent to $39.74 and Wellcare jumped 8.1
percent to $53.65.
Shares of JPMorgan Chase & Co dropped 5 percent to
$34.96 after a New York Times report projecting that losses from
a recent botched trade could reach $9 billion, more than four
times the original estimate.
U.S.-traded shares of Barclays slumped 14 percent to
$10.60 after Britain said it had brought in the fraud squad to
investigate possible crimes over attempts to manipulate lending
rates, a scandal that is expected to spread to other banks.
Lloyds fell 5.2 percent to $1.84 in New York.
Further weighing on the financial sector, Citi Investment
Research posted a bearish note on several U.S. banks including
Bank of America Corp and Goldman Sachs as the
slow economic recovery hurts trading.
Bank of America shares fell 2.6 percent to $7.57, while
Goldman Sachs lost 1.2 percent to $92.18. The KBW bank index
lost 2.2 percent.