wellpoint is the nation's largest managed care company. today it reported a 7.6% drop in second quarter earnings, pushing shares down more than 5% in trading today. we're going to go inside the numbers and look at how president obama's health care overhaul could impact the company. an exclusive interview with wayne deveydt, the cfo of wellpoint. thanks so much for joining us. so much to talk about. let me get your reaction to health care reform right now. what do you think about the deal that blue dog democrats have struck? >> well, obviously, there's still a lot to be done at this point. i would still say we're kind of in the sausagemaking phase. but we are happy to see that there's a bipartisan process moving forward at this point. so you know, obviously the devil's always in the details. i think we'll get more information as we work through it over the next several weeks or so. but so far we've been pleased with the fact that really the american voice is being heard and people are listening to not only what we have to bring to the table

we'll see if wellpoint can continue to that morning when it reports earnings. taking a look at bonds, the tep-year yield is at 3.43%. yesterday at this time, it was at about 3.5%. and we're all watching u.s. treasuries. we saw the two-year treasury yesterday, that massive $42 billion offering, not quite as robust as some of the previous. today we've got a five-year note at 1:00 new york time, one of a slew of offerings this week. so those are being watched. we've got the ten-year yield at 3. 6/6%. that's down from about 3.7% or so yesterday. taking a look at gold, the dollar is getting a respite and gold is coming down just a bit, off about 2 right now at $935.20. christine. >> bertha, let's get more on china's state construction, the ipo, biggest so far this year, the stock surging as much as 90% in the market earlier. lei, tell us more. >> we had a dramatic day and a big sell-off in china both which had been expected. so analysts say that is well ahead of fundamentals. the shanghai xotit had its worst day in eight months. the first day gains swung in a wide r

wellpoint's t the least exposure to the medica vaage program. at means it's not going to have the numbers cut likthe hmos. finally, when it comes to drugs themlves, i like gilead whi i think llurprise to the up side becse of the fabulous antiage, and abbott labs, but has been kept ba by the end less jabber. those two, which i bown for mire charitabltrust will be e new winners. again, n here. not unl the smoke clears. no, we didn't wanto lose oil. that's why we're gettingilled here. i'll have some more thoughts of that manipulation upward of the oil futuresater on in the show buthe fact is that il'sot a built-in weaess. it's zero sum. health care, on the other hand, can have real ng-term growth, even in a slowdown. and now that the health care reform issue i almost resolved, i think that gro emerges, again, after selloff as the new third leg of the three in one amid taking a rigful place withinancials and techs the same coination, by the way, tt led us throughout the great 1990's bl market. e bottom line -- we're not done going dow i didn't see t

it's been a mixed bag you could say but we'll get a fresh read for wellpoint. they report tomorrow, the biggest provider in the country and many people know wellpoint better as blue kroos cross blue shield. we have positive commentary from centene about the 2010 reimbursement rate environment. even on the government side of things, playing out somewhat positively. hospitals catching a bid today. tenant health care in line with expectations. the hospital operator did however raise guidance. they said sales are strong thanks to the outpatient procedures. universal health is going to report its numbers after the bell today. and community health is out with its report on thursday, maria, back over to you. >> coming up with the closing countdown after this short break. >> new regulations for the energy markets but are speculators really behind last year's oil spike and will regulation make things worse? answers ahead at 4:00 p.m. eastern. i get the question "does it work?" all the time, and you know what, it works. nutrisystem for men: flexible new programs personal

take a look here at wellpoint trading down more than 6%, $3.39. a share stock take a hit after the health imposed a 7.6% drop in earnings. enrollment falling 3%, and revenues also falling. so all of this contributing to the down side we're seeing right now. i do want to have a programming note here for you. the cfo of wellpoint will be on "closing bell" this afternoon at 4:00 p.m. eastern right here on cnbc. >> all right. microsoft's ceo telling analysts he expects antitrust opposition from their competition, namely search giant google, but he added he thinks the partnership has a good case. here's how the three are trading now in the wake of the news. only microsoft is higher and really essentially flat on the day. however, yahoo getting hammered, continues to fall down 11%. so what are the ramifications from the deal? are there antitrust concerns. >> let's ask david garety, principal of gba research and roger kaye, founder of end point technologies. roger, what do you think? are there antitrust concerns here? >> yeah, but less than for google. r

i'm going to take wellpoints. >> karen?ow, i am puttinmy money where my mouth i i'm buying back reig >> i did not have a good day day. buy a bit.to go to mcdonald's, i'm going to g myself one of those black angus burger, have a little bite to feel beer. >> got to go. thanks f watching. seu back here tomorrow. welcome to progogressivcom. yomust be lookingg for motoycle insurance. you're goooo thanks. so isouour ke insurance. althe coverage you need at g gat price. hold on,n, cowboy. cool. i'm not done -- for less than a dollar mth, you also get 24/7 roadside assistance. ght on. yeahah, vroom-vroom! sounds like you ra. more like 900 v-in. excuse me. , you're excused. the right insusurance f. now, that'sprressive. call or ick day. w est pro-health enamel seld otects... ...aininstnamel loss by formin a micro-thin s shiel against acid attack. prott althese areas. new crest pro-health enelhield. feels kind oli knives. aleve rkall day on my back pn.n. only two aleve liquid d gels c. that would take twice e as mann aleve allows mto

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he was recruited by aetna from wellpoint. aetna had gone on a buying binge.been an enormous amount of consolidation in the health insurance industry over the last several years. aetna bought a lot of competitors. it reached 21 million members. and... but what it realized and what investors began to see is that a lot of the businesses that it had bought were not all that profitable. so they were in... aetna was in a pickle. and they saw their stock price starting to plummet. so they brought... among the things they did was bring ron williams in. and williams, among the first thing he did was order a revamp of the i.t. system, so that... >> moyers: the information technology system. >> exactly, so that the company could determine more about which accounts were not profitable or marginally profitable. so, with that new system, he was able, and the other executives, to identify the accounts that they wanted to get rid of. and over the course of a very few years, they shed eight million members. >> moyers: eight million policy holders? >> eight million people-- me

. >> and with wellpoint, half the price -- >> exactly right.e got wellpoint and on the bottom of the list is another pbm, as you said, pharmaceutical benefits manager. >> right. >> express grip. so, again, the sector as a whole is looking across the board at growth and -- >> and these guys are reporting on wednesday. >> that's correct. >> okay and for more data on this go to buy the the numbers at cnbc.com. >> and i'm sure they will because you are aerial and know the numbers. where should you be putting your money? let's get the bulls and bears back in here. dan greenhouse is a bear. james paulson, wells capital management, one of our bulls, and steve staller back with his own firm, bear, and tom lyden of trends.com, a bull. anyone got a health care stock? tom, you see anything etf wise you like? >> there is a handful of health care etfs, but what i would look at is biotech etfs that have been on fire. ticker symbol ibb, you might want to look at those. the tough thing is taking individual health care stocks is dfl for the average investor. yo

wellpoint's got the least exposure to t the mecaca advantagage program. that means it's not g goi to hahave the numbersrsut like t hms. fifilly iikikegill ad,, which i think will surprise to t up side becauausef f efafabuus titiag and a abbt labs, but has been kept baback by t the e his jabber. ththe two, whichch i bhh ownoro mi charitable t tru will be the new winners. aiai not until t smoke cleaears , , we didn't want toto lose oi. that's why we're getting k kild here. i'i'llavav more ththouts, but th fact i is oil's got a buililt- weakakssss. it's veero umum. 6 the consumer, consumer manufacturer. health care, o on e e otr hand, can have reall long-term owth, enenn a slowdown. i they i emerges ahe sell-offff, kiki a rightful place with financials and d tes. the same combination, by the way, that ledss thugugut the eat 1990sulul market. the bottttominin -- wee not done going wn. i didn't see tss change i in oi cocomi. wh i didn't knoww out the maninilalati, but while w we changege leaders andlose oil,l,d yoyofefeel the pain, am telling you that healtlt

i hatechchasg it, b wellpoint kekes nse. do you like ththat? >> do.o.ssage frfr don i new w yo,, with today a sharp deine in ice, is this aaigigna to buy or stayay ay?y? >> i think y w wan to wait a a bit. e exchanges will l mo a a ltle lower.r. >>> all righgh you gogotouou aners. coming p, whether y youhould get into is name rigight now. plus the finalal trade i your first move f foromomorw. we'll bebeacack just a moment. mr. evans? this s is janice from onstar. ututatic signal i havn you've been in a arorontnd crash. do you neeeed lplp ah. ll contact emergency services and stay with youou. you okay? yeah. onstar. standard for o one. withth auiuies from fidelity. for life -- guararaneded.ak call... anleae titiment income thatat w't'to down -- guararaneded. call fidelely y at. guaranteed income e folili, ananchchan the way you think about youruretetirent savings. >>> time nowow to realal whoad e e mo money todayy in t whwhe e enre world? according g to a repopo publishd today, eddy lambert habeen sesellg g rgelocks o o his autozone stakake. he h has nln

pfizer or health care cost containers previously viewed to be the enemy, wellpoint, medco, express scriptswhen obama's poll numbers stink the buyers are more willing to pay up to the earnings of stocks than kept down by the entire agenda, the victims of cap and trade, health care reform. that's where we are right now. when you consider that every company had seemed to be teetering on the brink of life and death, it's no wonder their stocks go up repeatedly once we get the earnings reports that show they're far healthier than the original diagnosis suggests. more and more companies are being discharged from the hospital every single day. as we recognize the prices only stocks still in many cases reflect an illness that's far more severe than what they actually have. that revelation plus the false diagnosis of the tech stocks propel us higher and higher. here's the bottom line. the vast majority of patients continue to make recoveries from the miraculous, like apple, to the healthy like gold, to the soon-to-be discharged like caterpillar, like eaton, like the transports, like federal express

with managed care i think the bigger network providers like the unhs, the wellpoints, the aetnas, they'revery close to government pricing in traditional medicare. it's the humanas of the world that are more levered to more expensive areas of medicare advantage. and a final point. i think pharmaceutical companies are probably going to get hit a little bit harder than was originally anticipated, having to give up 100-plus billion dollars. and there are questions about the sustainability of those business models anyway and how innovative they are. so i think that's kind of how we're parsing it right now. and obviously, you know, we'll see how things develop over the summer. >> do you agree with that? >> yeah, i generally agree with all that. we're now digging in deeper and saying okay, how's home health care going to be treated? and when you get into a situation where congress is shorted on money, at the end of the process -- essentially overnight those cuts could be a little bit larger than anybody indicated. as congress goes to look -- seal the final deal. you've got to be watching this al

employer signers of this agreement which are pretty impressive, they include insurers like aetna, wellpoint, blue cross-blue shield of north carolina and blue cross-blue shield of massachusetts. and companies like our -- our first big company was pepsico. we have owings corning, lockheed martin, paychex, the houston independent school districts, nationwide children's hospital. and here's what they've all agreed to do. they have agreed to offer four visits with a primary care practitioner a year, with four advise dwroits a dietician a -- visits to a dietician a year for children of covered parents ages 3 to 18. this is just part of the normal benefit portfolio for children and youth. they've committed to a set of goals around the number of beneficiaries they hoped would use the benefits. we now have just almost a million kids being covered by this already, just in the last five months. and within the next couple of years we're trying to get it to 6.2 million which is what we think is the number necessary to cover 25% of all the overweight kids. in the country. in the age-group. so i'm not su

all this may be the catalyst, as our guest wellpointed out was last week's weak employment report, dinging the psyche. one bright spot today was the trade deficit. smallest in ten years, $26 billion. good news there, it wasn't with bigger negatives on imports. imports were definitely down but exports were positive, 1.6. when we chart the dollar index, quiet week, yet close to unchanged. if you want to read one of the best historical pieces on how the government in many ways screwed up the housing market through the gscs, go to the website. it's a great report. committee on oversight and government report, housing policy in creating global financial crisis of '08, interesting reading. back to you. >> i will get it. thank you. general motors coming out of bankruptcy at lightning speed. an incredible feat conferring the size and complexity of the automaker. ceo fritz henderson detailing how the new gm will look. phil lebeau behind the wheel for us in detroit with more. >> far leader general motors is what we are going to be seeing now that it's out of bankruptcy. take a look at what the new g

. >> then on the health care front, wellpoint did beat the street, the company who had eps of $1.50, seven cents ahead. revenues ahead of consent susz as well. 7.6% drop in the income hurt by lower enrollment and investment losses. lowerered the 2009 revenue forecast by $600 million to $60 billion. although the sector has done well because the policy that is shaping up in washington is not nearly as bad for business, quote un, unquote, as we think -- we feared it might have been. >> we had bob on this morning as he said that was his big pick probably over the last five or six months, the stock has been on a tear because those insurers hasn't suffered as a lot of people expected. >> guys? >> thank you very much for the update on industrial gasses. >>> coming up, social climbing, part three. julia explores business networking on the network. >> plus, bing, david sits down with the internet analysts at jefferies to talk about the microsoft/yahoo! bing. welcome to the now network. population: 49 million. right now 1.2 million people are on sprint mobile broadband. 31 are streaming a sale

specifically, we'd point you to big biotech stocks, biogen, amgen, and wellpoint and significant cignado any i.t.? patient billing -- >> electronic data. >> joe, that's absolutely true. but it's important to see that health care reform is not where the been -- it's not where you'll see the benefit. in the stimulus package that's already passed and in law is where you'll see hcit. we'd send to you cerner, although that whole sector should benefit dramatically. >> if i took a top-down approach that whatever happens, reform, no reform, there will be government incentives for new product development. should i take that and look at med tech or biotech? where should i focus for investment in that's my top-down approach? >> well f your top-down approach is that -- is that for whatever -- however it happens you're going to see more new product development in health care, then certainly biotech is the first place i'd send you. biotech is a -- is a great engine for new product development. medical technology, secondly, is an area. certainly, health care information technology is the third. >> i

united health earned $2.9 billion, wellpoint, $2.5 billion. and c.e.o. pay, united health care's stephen helmsley made $9.2 million. former united health group c.e.o. left his job in 2006 and still took home $1.1 billion. that's a lot of zeros. who are we kidding, mr. speaker? this is all about money. campaign contribution, c.e.o. salaries, millions in advertising to kill reform and billions in profits. that's what's at stake here. it's time to stop this nonsense and enact real reform that includes a public insurance option based on medicare rates and with a network of providers to lower cost and provide quality care. the speaker pro tempore: for what purpose does the gentleman from california rise? >> to address the house for one minute and revise and extend my remarks. the speaker pro tempore: without objection. mr. lungren: mr. speaker, this year we lost a comedian of some note named george car lynn. one of the marks of his career was when he challenged the f.c.c. with the seven dirty words. we're now engaged in a debate on health care and we've been

at wellpoint t worry about this? >> i am laughing because i am going to have somebody work the suppa and i will give this answer to you today. the last time somebody asked me if we were doing too much and now we do something nine out of nine days and be wondering if we are focusing too much on one thing. >> but do you worry your words are not as persuasive? on the night event as opposed to the first event? >> some of that will depend. noaa again, i think what the president strongly believes then he will do this tomorrow, certainly ten out of ten of the press conference. i think it is important that the president continues to remind the american people what is at stake, what is in it for them, why the status quo is unacceptable and unaffordable and what must be done in terms of this issue to lay that foundation for long-term economic growth. i don't think he can probably say that enough. there are, as we have discussed, there are people out there that are opposed to this. their special-interest groups out there that a