Health Care Companies Pull Tuesday Stocks Higher

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.

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