Wednesday proved to be a good day for the Dow Jones Industrials (DJINDICES: ^DJI ) , which closed the day up almost 118 points. But the Dow had to earn its gains, recovering from losses early in the session prompted by domestic economic fears. All it took to boost the Dow, though, was news that Russia's armed forces had withdrawn from the Ukrainian border, taking away some of the risk of economic sanctions that could have directly and dramatically affected many components of the Dow Jones Industrials and other U.S. companies. In the end, though, UnitedHealth Group (NYSE: UNH ) and American Express (NYSE: AXP ) were the big winners on the day.
UnitedHealth Group jumped 3.5% on a good day throughout the health-insurance space. Reports from major insurers show that large percentages of participants in the Affordable Care Act's health-insurance exchanges have successfully paid their first-month premiums, with figures ranging from 80% to 90%. One of the concerns that some had expressed about Obamacare was that people would sign up but then never pay their initial premiums, which could have put UnitedHealth and other insurers in an uncomfortable situation. Moreover, one of UnitedHealth's main rivals in the Medicaid and commercial-plan space reported strong results today, and that helped lift shareholders' spirits about UnitedHealth's prospects as well.
American Express rose more than 2%. Credit-card network stocks both within the Dow Jones Industrials and outside it had all suffered declines amid worries that economic sanctions against Russia could impose new rules on foreign transaction handling, and so news of Russia's withdrawal raised hopes that the U.S. would loosen economic sanctions against Russia and thereby avoid any retaliatory sanctions from the Russian government. Yet even with that good news as context, American Express still got some bad news today. A federal court ruling that a lawsuit by the Justice Department and several state attorneys general could proceed to trial, choosing not to grant American Express' request for summary judgment in its favor without further proceedings. The lawsuit challenged the practice of not allowing retailers to offer discounts for cash or other forms of payment, arguing that it had an anticompetitive effect. Unlike its larger card-network counterparts, which settled similar charges, AmEx has pursued the litigation through to the trial stage, and it'll be interesting to see if American Express actually lets it go to trial or tries to settle at this point. Still, investors don't seem to see the suit as a major threat.
Good days like Wednesday show the resiliency of the Dow Jones Industrials and its five-year-old bull market. Even though challenges remain, the Dow appears to have momentum that could carry it back toward record highs if the good news continues.
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