US stocks rose yesterday, led by the healthcare sector after a government decision on payment rates, while factory orders data confirmed the economy is steadily improving.
The S&P 500 closed at another record high, although it fell short of breaking above its all-time intraday high of 1,576.09 during the session. The Dow Jones also ended at another record high.
The US government dropped plans to cut payments for private Medicare Advantage insurers and instead said it would allow a 3.3 per cent raise.
The news boosted shares of some health insurers, including Humana, which derives about two-thirds of its revenue from Medicare Advantage business. The stock jumped 5.5 per cent to $79.11 and was among the biggest percentage gainers on the S&P 500. UnitedHealth Group gained 4.7 per cent to $61.74.
“They didn't expect the result that they got. That will help with their bottom line,” said Quincy Krosby, market strategist at Prudential Financial.
Strengthening US data has helped stocks rally since the start of the year. And yesterday data showed that February factory orders rose three per cent, slightly above expectations. That follows a weak reading on US manufacturing on Monday that sparked a pullback in stocks. The S&P 500 is up 10.1 per cent since the start of 2013.
For the day, the Dow Jones industrial average was up 89.16 points, or 0.61 per cent, at 14,662.01. The Standard & Poor’s 500 Index was up 8.08 points, or 0.52 per cent, at 1,570.25. The Nasdaq Composite Index was up 15.69 points, or 0.48 per cent, at 3,254.86.
The S&P 500 set a new closing high last Thursday, while the Dow first surpassed its 2007 record on 5 March.
Stocks pared gains late in the session, giving investors another reason to examine the recent rally.
New York Report