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UnitedHealth Dashes, HP Crashes

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The Dow Jones Industrial Average (DJINDICES: ^DJI  ) and S&P 500 touched new record highs today led by the health-care sector, which jumped following a surprise increase in Medicare Advantage payout rates.

The Dow crossed 14,600 for the first time, gaining 0.6% or 89 points, to finish at 14,662. After hours yesterday, the Center for Medicare and Medicaid Services reversed earlier signals that it would lower Medicare Advantage payouts by 2.2% and instead decided to raise them 3.3%. Not surprisingly, health-insurance stocks rallied across the board, with UnitedHealth Group (NYSE: UNH  ) gaining 4.7% to lead all Dow stocks. Humana, which is heavily dependent on Medicare payouts, jumped 5.5%, and Aetna gained 3.7%.

Factory orders for February were also better than expected, increasing 3% on expectations of 2.6%. January orders were also revised upward from -2% to -1%. On a similar note, auto sales from the Big Three hit their best sales level in five years in March on higher demand for fuel-efficient vehicles and pick-up trucks.

Not all stocks made headway today, though. Hewlett-Packard (NYSE: HPQ  ) sank 5.2 % after Goldman Sachs downgraded the PC-maker to "sell" from "hold." The investment bank said HP may be overbought after its recent run-up, adding that investors may be overly hopeful for a turnaround, considering its key PC and printer businesses continue to decline. Goldman also that HP will have to invest much of its cash flow in research and development, putting a further strain on profits.

Elsewhere, Procter & Gamble (NYSE: PG  ) moved up 1.6% after the consumer-goods giant said it had achieved zero waste in 25% or 45 of its manufacturing facilities worldwide, with another 20 soon to meet the sustainable standard. P&G now uses 99% of materials that enter its factories, and the news serves as a reminder that P&G continues to innovate and lets consumer know they can feel good about buying P&G products.

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.

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Related Tickers

9/27/2016 4:45 PM
^DJI $18228.30 Up +133.47 +0.74%
HPQ $15.34 Up +0.32 +2.13%
HP CAPS Rating: ***
PG $88.36 Up +0.51 +0.58%
Procter and Gamble CAPS Rating: ****
UNH $140.79 Up +1.07 +0.77%
UnitedHealth Group CAPS Rating: ****