Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Today's 3 Best Stocks

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Between a change of heart for insurers in the health-care sector and strong U.S. auto sales, the broad-based S&P 500 (SNPINDEX: ^GSPC  ) is once again off to the races, eclipsing another all-time record high.

U.S. auto-sales figures released today also shed light on an improving automotive industry -- at least domestically. Ford (NYSE: F  ) was a big bright spot, showing unit sales growth of 6% in March for its best monthly performance in almost six years. Utility sales rose 14%, and its iconic F-Series trucks saw a 16% boost in unit sales. Higher automotive sales are indicative of consumers' willingness to spend, and with consumer spending accounting for so much of U.S. GDP, that's a bullish sign that the recovery is still ongoing.

All told, the S&P 500 finished the day higher by 8.08 points (0.52%) to close at 1,570.25.

But, make no mistake about it: Today was almost entirely about the health-care sector. In fact, each of the top six performers in the S&P 500 were health-care components.

Leading the charge higher were companies with exposure to Medicare Advantage, a supplemental health-care benefits plan targeted at seniors that offers broader coverage and lower out-of-pocket costs for a fee. In February, the Centers for Medicare and Medicaid Services, or CMS, had cautioned insurers to expect a drop in Medicare Advantage reimbursement rates. Last night, we learned that the CMS had reversed that decision and instead of a 2.3% drop in rates, insurers were going to see a 3.3% boost in reimbursements. The reasoning behind the sudden change of heart had to do with the rate at which doctors get compensation, which the CMS now estimates won't drop as much as it previously forecast.

This is the primary reason Humana (NYSE: HUM  ) , DaVita Healthcare (NYSE: DVA  ) , and the nation's largest health insurer, UnitedHealth Group (NYSE: UNH  ) , advanced by 5.5%, 6.1%, and 4.7%, respectively, and were the top performers in the S&P 500. Humana, in particular, garners nearly two-thirds of its revenue from Medicare Advantage plans, so this will have an immediate and direct impact on its bottom line. UnitedHealth Group gets only about 25% of its revenue from Medicare Advantage, so its gains were a bit more tempered. The same can be said for DaVita, which gets the majority of its profits from its dialysis centers rather than its physical networks.

With Obamacare on the way, is this insurer a smart play?
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.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2342663, ~/Articles/ArticleHandler.aspx, 8/24/2016 1:17:36 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 4 hours ago Sponsored by:
DOW 18,547.30 17.88 0.10%
S&P 500 2,186.90 4.26 0.20%
NASD 5,260.08 15.48 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/23/2016 4:33 PM
^GSPC $2186.90 Up +4.26 +0.20%
S&P 500 INDEX CAPS Rating: No stars
DVA $65.45 Up +0.28 +0.43%
DaVita CAPS Rating: *****
HUM $179.86 Down -0.56 -0.31%
Humana CAPS Rating: ****
UNH $142.01 Down -0.08 -0.06%
UnitedHealth Group CAPS Rating: ****
F $12.42 Up +0.06 +0.49%
Ford CAPS Rating: ****