Market Minute: HMO Stocks Rise on Medicare Advantage News

Before you go, we thought you'd like these...
Before you go close icon
The Humana Inc. headquarters office stands in Louisville, Kentucky, U.S., on Friday, July 13, 2012. Humana Inc., a managed health care company, offers coordinated health care through health maintenance organizations, preferred provider organizations, point-of-service plans, and administrative services products. Photographer: Ty Wright/Bloomberg via Getty Images
Ty Wright/Bloomberg via Getty Images
Produced by Drew Trachtenberg

The Dow and the S&P 500 retreated yesterday from record highs. The Dow edged lower by five points, the S&P lost seven and the Nasdaq fell 28 points.

Shares of health insurance provider Humana (HUM) jumped yesterday and are set to gain more today. This follows an apparent change of course by Medicare, which is now calling for an increase in reimbursement rates on its Advantage plans. UnitedHealth (UNH), Aetna (AET) and Wellpoint (WLP) are also on the rise.

Another supporter falls off of the Apple (AAPL) bandwagon. Goldman Sachs (GS) dropped Apple from its conviction buy list, and lowered its price target on the stock. But Goldman still expects Apple to hit 575 dollars a share within the next 12 months. It's now around 429 a share.

A former Anheuser-Busch (BUD) employee claims the company has filed suit against him in order to silence him. The employee charged last week that the company is selling watered-down beer. Anheuser-Busch rejects those allegations.

The major automakers report domestic sales for March, and analysts are looking the recent strong sales trend to continue. Edmunds expects the best annual sales rate in almost six years. Yesterday, General Motors (GM) launched a new front in its battle with Ford over pick-up trucks. GM claims its Sierra and the soon-to-be released 8-cylinder Silverado get better gas mileage than Ford's top-selling F-150.

Verizon (VZ) and AT&T (T) are reportedly working on a plan to break-up Vodaphone. According to a Financial Times blog, Verizon would acquire the U.S. assets and AT&T would take the overseas assets. The deal would value Vodaphone at 245-billion dollars.

And shares of Nuance Communications (NUAN) are set to rally on word that billionaire investor Carl Icahn has taken a nine percent stake. It's described as a passive stake, which means he's not seeking a takeover of the speech recognition firm.

27 PHOTOS
Test Your Financial Fluency
See Gallery
Market Minute: HMO Stocks Rise on Medicare Advantage News

From taxes and credit to saving and money management, you can get lost in the complexity and abundance of financial issues. But by learning some simple fundamentals, you can take control of your finances and feel secure in your money management skills.

How well do you know the basics of personal finance?

Put your knowledge to the test with this 12-question quiz.

A. Under your mattress
B. Stocks
C. Bonds
D. Bank savings account
You want money you plan to use within the next three to five years to be safe and easily accessible. Lock it up in a savings or money market account. You won't earn much interest on it with rates so low, but you also won't lose any of it to the volatility of the stock market. You can find search for which accounts are offering the best rates on Bankrate.com.
A. Suck up to the boss
B. Get a second job
C. Adjust your tax withholding
If you typically get a tax refund each spring (and most of you do), file a new Form W-4 with your employer to increase the number of exemptions you claim - and lower the amount Uncle Sam takes from your paycheck. Try our easy-to-use tax withholding calculator to help you figure the right number for your situation.
A. Pay bills on time and keep credit-card balances low
B. Limit applications for new credit and keep old accounts open
C. Sweet-talk the credit-card company phone rep
The simple act of paying bills on time and keeping your balances low accounts for 65% of your credit score. New credit and the length of your credit history make up 25% of your score. The remaining 10% factors in the types of credit you use. Sorry, sweet-talking will get you nowhere.
A. Treasury bonds
B. Money market account
C. Stocks
D. Residential real estate
Stocks fare best over long stretches of time. Take the 20-year period through 2012, for example. The average taxable U.S. money-market fund returned 2.8% annualized. Residential real estate, as measured by Standard & Poor's Case-Shiller index, did just slightly better with 3.0% annualized. Barclay's U.S. Treasury index earned 6.3% a year, on average. And the S&P 500 trumped them all, delivering 8.2% annualized.
A. Life insurance
B. Health insurance
C. Auto insurance
You only need life insurance if you have someone depending on you financially. Bob is unwed and childless, so he doesn't need it. However, he will need health insurance and auto insurance to protect himself against disaster.
A. 401(k)
B. 529 plan
C. Municipal bonds
D. Certificate of deposit
E. None of the above
A bank CD falls under federal protection if it's FDIC insured. That means up to $250,000 is protected in case a bank goes under, and you get up to $250,000 of insurance at each bank where you buy CDs. Municipal bonds, 529 plans, 401(k)s and other investments are not covered. You invest at your own risk.

Ashley, age 20, contributes $3,000 per year to an individual retirement account for ten years, then stops, letting her money sit in the account. Adam, age 30, contributes $3,000 each year to an IRA for 35 years. Who will have more money at age 65, assuming they get identical investment returns?

 

A. Ashley
B. Adam

Ashley comes out ahead, thanks to the magic of compounding. Even though she stopped contributing after only ten years, her money will grow to about $694,000 by the time she retires, assuming an 8% annual return. Adam, who got a late start, but pitched in more money out of pocket, will amass about $558,000.
A. Your credit score
B. Your car make and model
C. Your car color
D. Your address
Insurers look at a variety of factors to calculate your risk, but the color of your car isn't one of them. Your financial habits, the type of car you drive and where you drive do matter.
A. At age 16
B. At age 18
C. When they get their first job
D. When their income reaches certain levels
A child's age or job has nothing to do with it. Rather, the IRS cares about how much the child made and the source of the income. For example, children who have investment income of more than $950 or have wage income of more than $5,950 in 2012 need to file a return. Children who receive a paycheck and have taxes withheld may want to file even if they don't have to - they could reclaim most or all of their income taxes.

You can withdraw contributions you made to a Roth IRA at any time, for any purpose without paying any taxes or penalties, and without having to pay it back - ever.

 

A. True
B. False

Any money you put into your Roth IRA is yours for the taking - even if you aren't retired. The money your account earns, however, cannot be touched until you're 59½ and have had a Roth for at least five years. Otherwise, you'll owe taxes and a 10% early withdrawal penalty on earnings. An exception: Once the money's been in your account for five years, you can tap your earnings to buy your first home.
A. Cry
B. Notify your bank and credit-card companies
C. Contact the credit bureaus
D. Call the Social Security office
Put your tears of frustration on hold. First, notify your credit-card companies and bank to monitor your accounts for fraudulent charges, just in case your wallet falls into the wrong hands. Second, contact the credit bureaus and put a fraud alert on your report. This will require lenders to make an effort to verify your identity before issuing new credit in your name. It also gives you a free copy of your credit report so you can review it for suspicious activity.

A. Upgrade your lifestyle: You've been pinching pennies for too long. It's time to reward yourself and live it up.

B. Maintain your lifestyle: Take this opportunity to pay off your high-interest debts and boost your savings. It's time to get ahead. 

Sure, it's tempting to spend the money, but using it to strengthen your financial footing is the smarter choice that'll pay off exponentially in the long run.

of
SEE ALL
BACK TO SLIDE
SHOW CAPTION +
HIDE CAPTION
Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners