The Dow Jones Industrial Average and S&P 500 touched new record highs today led by the health-care sector, which jumped following a surprise increase in Medicare Advantage payout rates.
The Dow crossed 14,600 for the first time, gaining 0.6% or 89 points, to finish at 14,662. After hours yesterday, the Center for Medicare and Medicaid Services reversed earlier signals that it would lower Medicare Advantage payouts by 2.2% and instead decided to raise them 3.3%. Not surprisingly, health-insurance stocks rallied across the board, with UnitedHealth Group gaining 4.7% to lead all Dow stocks. Humana, which is heavily dependent on Medicare payouts, jumped 5.5%, and Aetna gained 3.7%.
Factory orders for February were also better than expected, increasing 3% on expectations of 2.6%. January orders were also revised upward from -2% to -1%. On a similar note, auto sales from the Big Three hit their best sales level in five years in March on higher demand for fuel-efficient vehicles and pick-up trucks.
Not all stocks made headway today, though. Hewlett-Packard sank 5.2 % after Goldman Sachs downgraded the PC-maker to "sell" from "hold." The investment bank said HP may be overbought after its recent run-up, adding that investors may be overly hopeful for a turnaround, considering its key PC and printer businesses continue to decline. Goldman also that HP will have to invest much of its cash flow in research and development, putting a further strain on profits.
Elsewhere, Procter & Gamble moved up 1.6% after the consumer-goods giant said it had achieved zero waste in 25% or 45 of its manufacturing facilities worldwide, with another 20 soon to meet the sustainable standard. P&G now uses 99% of materials that enter its factories, and the news serves as a reminder that P&G continues to innovate and lets consumer know they can feel good about buying P&G products.
When President Obama was re-elected, shares of UnitedHealth and other health insurers fell immediately. Is Obamacare a death knell for health insurers, or is the market missing out on some of the opportunities the law presents? In this brand-new premium report on UnitedHealth, The Motley Fool takes a long-term view, homing in on prospects for UnitedHealth in an Obamacare world. So don't miss out -- simply click here now to claim your copy today.
The article UnitedHealth Dashes, HP Crashes originally appeared on Fool.com.
Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool recommends Procter & Gamble and UnitedHealth Group. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.