WellPoint Net Falls, Yet Pricing, Cost Moves Please Investors

WellPoint Inc.'s second-quarter earnings fell 10%, and the health insurer pared its 2008 profit outlook. Yet signs that it has addressed prior pricing mistakes and is getting ahead of rising medical costs spurred a second-day rally in health insurers' stocks.

The results were better than investors had anticipated, and they arrived a day after UnitedHealth Group Inc. -- another health-insurance giant beset by profit warnings this year -- also met Wall Street's lowered expectations. Investors seemed particularly heartened that after failing to accurately assess medical costs and missing earnings projections earlier this year, WellPoint appeared to be remedying those missteps.