Investors are nervous about what the Federal Reserve might do with interest rates when it meets later this week, and that nervousness is showing up in major market indexes. On Tuesday, the Nasdaq Composite (^IXIC -0.52%) was down about half a percent as of noon ET, actually managing to post slightly smaller losses than other popular benchmarks.
Even with the Nasdaq down, though, there were plenty of companies that had good news to help their share prices rise. Two in particular caught investors' eyes Tuesday morning. Here's why Wall Street is taking a closer look at Wynn Resorts (WYNN -1.42%) and Change Healthcare (CHNG) and whether the day's share-price gains could build from here.
Wynn gets a potential win
Shares of Wynn Resorts were up more than 5% at midday on Tuesday. The global casino resort giant's shareholders drew some encouragement from the prospects of a loosening of pandemic-related restrictions that could send more visitors through its doors.
The Hong Kong government said that it hopes to come out with a reopening solution in the near future. The city currently requires a period of hotel quarantine for arriving passengers from abroad, which is in line with Mainland China's zero-COVID policy. However, city officials are aware that the rest of the world is taking a more relaxed stance toward controlling the public health threat, and it wants to avoid losing its competitive position among global destinations. In particular, Hong Kong expressed interest in having major events return.
Investors apparently believe that a more lax strategy in Hong Kong could equate to similar easing of restrictions affecting Macao, where Wynn and a number of its industry competitors have major casino resorts. Indeed, Macao represents the biggest moneymaker for Wynn across its global footprint, so the prospects of having more visitors return to casino floors has massive implications for the company.
Even after today's gains, Wynn stock trades at half its level from before the pandemic. Even if a reopening strategy proves to be gradual and prolonged in nature, it will still give shareholders a boost of confidence that conditions might become more favorable over time.
Change Healthcare gets support
Elsewhere, shares of Change Healthcare moved higher by more than 6%. After some concerns that a prospective acquisition of the healthcare technology company might get scuttled by regulators, a favorable court decision paved the way for the transaction to go forward.
UnitedHealth Group (UNH 2.96%) made an acquisition bid for Change Healthcare in early 2021, agreeing to a cash deal that would pay Change investors $25.75 per share for their stock. However, antitrust concerns held back the deal, and even after UnitedHealth made commitments to divest parts of Change's business upon completing the deal, the resolution remained uncertain.
However, a federal judge rejected the Justice Department's antitrust arguments against the merger, instead allowing the deal to move forward. The stock moved above the $25.75-per-share deal price because of commitments from UnitedHealth for Change shareholders to receive a $2-per-share special dividend as part of the completion of the acquisition.
Whenever market conditions are volatile, shareholders of companies that are involved in potential mergers and acquisitions start to get nervous that a deal could fall through, resulting in a big drop in the share price. For Change Healthcare shareholders, though, it now appears that the waiting is over. Moreover, even after those investors get their payday, Change's business will continue to contribute to the financial prospects for health insurance giant UnitedHealth going forward.
