U.S. stock advance led by health-care sector
Overhaul means more customers for hospitals, pharmaceuticals, analysts say
marketwatch.com
"We investors understand the broad outlines of health-care reform and we know, almost immediately, children with pre-existing conditions will be covered; and we do know that kids who graduate from college and don't yet have a job will be covered, and some adults with pre-existing conditions will be covered. But not much else happens right away," said Hugh Johnson, chairman of Johnson Illington Advisors.
"Health-care reform will now be transferred from the politicians to the professionals to work out the details, and that's good news," said Johnson.
The Dow Jones Industrial Average (INDU 10,795, +53.28, +0.50%) gained 47.09 points to 10,789.07, with 23 of its 30 components advancing.
Blue-chip gains were led by DuPont (DD 37.83, +0.97, +2.63%) , up 2.3%, and American Express Co. (AXP 41.09, +0.76, +1.87%) , recently rising 2%.
Pharmaceuticals also bolstered the Dow, with Pfizer Inc. (PFE 17.18, +0.27, +1.59%) gaining 1.8% and Merck & Co. (MRK 38.40, +0.34, +0.89%) up 1.7%.
The S&P 500 Index (SPX 1,166, +6.49, +0.56%) rose 3.88 points to 1,163.78, with health care leading the gains among the index's 10 industry groups. Utilities and energy were the only two sectors on the decline.
The Nasdaq Composite Index (COMP 2,398, +23.24, +0.98%) climbed 15.39 points to 2,389.8.
Tenet Healthcare Corp. (THC 6.24, +0.49, +8.52%) was among those rallying, its shares up 8%, in the wake of passage of a health-care overhaul after a year of debate. Health Management Associates Inc. (HMA 8.85, +0.72, +8.86%) was up 8.4% at $8.81 after earlier rising to a 52-week high of $8.90.
President Barack Obama is expected to sign the bill into law on Tuesday. Read full story about historic health-care vote.
"The additional folks that will be added to the insured ranks is helping pharmaceutical companies, since [more people] will now have a way to pay for drugs," said Robert Pavlik, chief market strategist at Banyan Partners.
The market's rise also reflects "the 2014 date it kicks in," Pavlik added.
Advancing stocks topped those declining by a roughly 3 to 2 ratio on the New York Stock Exchange, with composite volume topping 2.3 billion in afternoon trades.
Energy shares led sector declines, with the price of crude-oil futures hovering around $81 a barrel. Read Futures Movers.
The stock gains trumped an opening decline that came with worries about increasing government debt, climbing interest rates and the potential impact on the global recovery.
"Rates are rising overseas, giving upward pressure on the dollar. That's why you saw the market sell-off initially," according to Pavlik.
With Wall Street expected to slowly grind higher in the long run, investors are using dips as buying opportunities, he said. "Any short-term weakness is giving investors an opportunity to step up and do a little bargain-hunting."
The Reserve Bank of India hiked its benchmark rates after the country's markets closed on Friday to curb rising inflation, echoing similar moves this month in Australia and Malaysia.
Mixed signals from European leaders about aid to debt-riddled Greece also weighed on the market.
"The European Union may be a paper tiger if it doesn't even support its own members," Pavlik commented on the possibility that Greece might seek aid from the International Monetary Fund.
Major stock indexes fell Friday because of the reignited worries about Greece, although the averages all finished higher on the week.
"The market is doing more of the same, which is a slow crawl higher, which is occurring because prospects for the economy and for earnings are still positive," said Johnson.
Kate Gibson is a reporter for MarketWatch, based in New York. |
