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



UnitedHealth's Big Day Sends the Dow to Huge Gains

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

The markets have gone on a tear to kick off the new week, with the Dow Jones Industrial Average (DJINDICES: ^DJI  ) up more than 175 points as of 2:30 p.m. EST. Propelled by the large majority of its 30 blue-chip stocks, the index is inching back toward its record high set last year. UnitedHealth Group (NYSE: UNH  ) was up 3.6% as the big winner in a huge day for health insurance stocks across the country, while fellow Dow health care giant Pfizer (NYSE: PFE  ) has also picked up steam. Let's catch up on what you need to know.

Medicare cuts don't faze investors
UnitedHealth investors got a scare at the end of last week when the Obama administration announced proposed cuts to Medicare payouts in 2015. However, many industry observers had expected deeper reductions to the payments, particularly to Medicare Advantage, where the administration's cuts likely will amount to a 3.55% rate slash for next year. That's at the low end of what Humana (NYSE: HUM  ) , one of UnitedHealth's top rivals and one of the leading Medicare Advantage providers, had anticipated. That was good enough to spike shares across the industry.

Make no mistake, the rate cut will hit Medicare performance at UnitedHealth, Humana, and other top insurers in a big way next year, making potential rising costs from Obamacare's rollout all the more painful. With roughly 30% of Medicare subscribers enrolled in Medicare Advantage plans, a substantial amount of business at the largest insurers is under fire. However, even these newly announced reductions aren't final: expect a big push by the industry and other concerned parties to pull back those reductions. By the time April rolls around, final cuts to Medicare could end up much smaller. In the end, UnitedHealth and its rivals still look strong heading into 2015.

Pfizer's stock has rallied by 1.4% after the company announced that a new study for its Prevnar 13 childhood pneumonia vaccine showed the drug's prevention of pneumonia in elderly patients aged 65 and up in a study of more than 85,000 patients. It's potentially a mammoth win for Pfizer and its top vaccine, which counts annual sales of more than $4 billion. Analysts have projected that expanded usage for the vaccine in battling pneumonia could send annual revenue soaring to more than $5 billion.

Finally, Microsoft's (NASDAQ: MSFT  ) stock is among the Dow's worst today with a 0.34% drop. Microsoft today announced a 70% price cut for its Windows 8.1 operating system as competition puts pressure on this usually dominant OS maker. Windows 8 has struggled to catch on with users as fast as previous iterations of the ubiquitous Windows OS, even though more than 200 million subscriptions to the software have been sold since its launch, according to Microsoft. The company has angled its latest operating system to take advantage of the mobile rise and the fall of the PC segment. But with plenty of options for selective users in the OS space, Microsoft will have to appeal to price-conscious buyers to keep up.

Is your portfolio ready for the market's moves?
Millions of Americans have waited on the sidelines since the market meltdown in 2008 and 2009, too scared to invest and put their money at further risk. Yet those who've stayed out of the market have missed out on huge gains and put their financial futures in jeopardy. In our brand-new special report, "Your Essential Guide to Start Investing Today," The Motley Fool's personal finance experts show you why investing is so important and what you need to do to get started. Click here to get your copy today -- it's absolutely free.

Read/Post Comments (0) | Recommend This Article (1)

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.

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: 2851611, ~/Articles/ArticleHandler.aspx, 9/2/2015 8:09:28 PM

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...

Dan Carroll

Dan began writing for the Motley Fool in 2012. He is a health care specialist who also follows the defense industry along with tracking the broader U.S. and international markets.

Today's Market

updated Moments ago Sponsored by:
DOW 16,351.38 293.03 1.82%
S&P 500 1,948.86 35.01 1.83%
NASD 4,749.98 113.87 2.46%

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

9/2/2015 4:36 PM
^DJI $16351.38 Up +293.03 +1.82%
HUM $181.70 Up +2.45 +1.37%
Humana, Inc. CAPS Rating: ****
MSFT $43.36 Up +1.54 +3.68%
Microsoft CAPS Rating: ***
PFE $31.97 Up +0.61 +1.95%
Pfizer CAPS Rating: ****
UNH $114.23 Up +1.60 +1.42%
UnitedHealth Group CAPS Rating: ****