The Dow's Top 3 Stocks This Week

If you'd only read the headlines, you'd think it was a rough week on Wall Street. Employment numbers were terrible and the housing market may be slowing a bit, but stocks moved sideways once again. The Dow Jones Industrial Average fell just 0.09% this week, and the S&P 500 lost only 1%. Despite the declines overall, there were a few big winners on the Dow this week.

UnitedHealth Group jumped 8.5%, boosted by a surprise increase in Medicare Advantage reimbursements. The government initially proposed a 2.2% cut in rates, but after much lobbying from the industry, it did a 180 and decided to increase reimbursements by 3.3%. Across the board, insurers loved the news, and UnitedHealth won't be under the same margin pressure some had feared in 2014.

AT&T was second on the Dow, climbing 3.6% for the week. Investors cheered when Facebook announced that the first Facebook Home-specific device, made by HTC, will be exclusive to AT&T. The pop on Thursday was probably overdone, though, because Home will be available on most Android phones and there doesn't appear to be any long-term advantage for AT&T with Home. Friday was also the last day to own AT&T before getting a $0.45-per-share dividend, so that may have boosted the stock slightly late in the week.

Merck rounds out the top three this week, climbing 2.1%. Aside from a lawsuit against India's Glenmark Pharmaceuticals over the potential infringement on two diabetes drugs, it was a fairly quiet week for Merck. The company got a bit of a boost when the Medicare Advantage reimbursement news came out, probably because investors are hoping margins won't be squeezed further down the medical value chain. If insurers are generating less revenue, they'll push for lower prices from pharmaceutical companies, so the higher rates may be an incremental positive for the company. Investors are also looking forward to earnings, which Merck will release on May 1.

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Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool recommends Facebook and UnitedHealth Group and owns shares of Facebook. 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.

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