Dow at 10,831 this morning, up 45 points.
NEW YORK (AP) — Drug and hospital companies led stocks higher
Monday after lawmakers ended months of uncertainty and approved the
health care overhaul bill.
The Dow Jones industrial average rose about 44 points. Broader
indexes also climbed.
Investors had expected the health care bill would pass the House,
but the approval late Sunday removed some of the anxiety about
health care that has dogged stocks of hospitals and drug makers. A
bill with changes made by the House now goes back to the Senate for
approval. Debate could begin Tuesday.
The changes from the 10-year, $938 billion bill will have
far-reaching effects on health companies. With the bill in hand,
investors could place bets on winners and losers. Hospital stocks
rose on expectations they would see more business and increased
revenue. Some insurers fell because of greater restrictions imposed
by the changes.
Hospital operator Tenet Healthcare Corp. rose 9 percent, while
UnitedHealth Group Inc. fell 3.2 percent.
Stocks opened lower following more doubts about Greece’s ability to
repay its debt. Concern about the country’s fiscal crunch pushed
investors into the safety of the dollar in morning trading. Stocks
extended their gains after demand for the dollar eased.
Traders focused on health stocks because the bill passed by the
House will extend benefits to 32 million uninsured Americans. That
means increased business for hospitals and drug makers. Many of the
key points of the bill will not go into effect for several
years.
“You’ve got some uncertainty here lifted,” said Jack Ablin, chief
investment officer at Harris Private Bank in Chicago. Ablin noted,
however, that other industries will face higher costs to pay for
wider coverage. “What it really comes down to is that as a result
of this bill health care is a beneficiary at the expense of every
other sector.”
Stocks have been rising steadily in recent weeks as investors grow
more confident in a rebound following a string of improved economic
reports. At the same time, much of the advance has come on light
trading volume. That signals that not all the gains are tied to
increasing expectations about the economy. Some analysts say that
stocks are rising in a vacuum rather than because investors
strongly believe that the market is poised to go higher.
According to preliminary calculations, the Dow rose 43.91, or 0.4
percent, to 10,785.89. The Standard & Poor’s 500 index rose 5.91,
or 0.5 percent, to 1,165.81, while the Nasdaq composite index rose
20.99, or 0.9 percent, to 2,395.40.
