UnitedHealth shares rebound after Monday drop

UnitedHealth shares had dropped to a 52-week low Monday, sinking about 17 percent to close at $21, as the broader market reeled after the U.S. House of Representatives rejected a $700 billion rescue plan for the financial sector.

The price of several health insurance stocks fell a few percentage points during trading Monday, even while the broader market was falling even more sharply. But UnitedHealth and other companies outside the sector took an additional hit on high volume at the end of the trading day.

Citi Investment Research analyst Charles Boorady saw no problem specific to UnitedHealth or any news event that would explain the sudden end-of-day price drop.

UnitedHealth shares rose quickly Tuesday morning, and the stock traded for $24.86 in the afternoon, up more than 18 percent from the previous close.

"This is coming back to where it should have closed yesterday," Boorady said.

UnitedHealth was among many stocks that had "huge order imbalances" as the close of trading approached Monday, said Ray Pellecchia, a spokesman for the New York Stock Exchange. A stock's price can drop rapidly when it has many sellers and no buyers within several price points.

Pellecchia pointed to general market concerns over the shaky economy or the bailout failure to explain the imbalances. He said trading wasn't hampered by a system glitch or problems with the exchange.

Health insurer stock prices as a whole fell with the broader market on Monday, as concerns over the credit market lingered and the sector faced uncertainty over future Medicare Advantage reimbursement.