How UnitedHealth Helped Ease the Dow's Pain

The stock market fell, but UnitedHealth was one of the biggest gainers in the Dow.

Dan Caplinger
Dan Caplinger
Mar 25, 2013 at 8:00PM
Markets

Investors got what they expected over the weekend, as a bailout for banks in Cyprus finally materialized at the last minute. But apparently, the exact terms of the bailout weren't what investors had been hoping to see. After initially gaining ground and sending the S&P 500 close to a new record early in the day, stocks reversed dramatically, plunging to losses of more than 100 points. The selloff came from fears that a cascading impact of bank-related problems in other European countries such as Spain and Italy could result from the Cypriot deal. By the close, the Dow Jones Industrials (DJINDICES:^DJI) were down 64 points, although broader markets were down a bit less steeply.

But some stocks in the Dow rose. UnitedHealth Group (NYSE:UNH) gained three-quarters of a percent as it managed to pick up some business serving Arizona's Medicaid program in the two largest counties in the state, as well as winning a contract serving children's rehab statewide. The pick-up came at the expense of Vanguard Health (UNKNOWN:VHS.DL), which saw its shares drop more than 6% on news that it had lost the Arizona contract. Health-care companies will increasingly have to defend their territory as competition increases, especially on government contracts that will get more important as Obamacare takes effect.

Elsewhere, Acadia Pharmaceuticals (NASDAQ:ACAD) soared nearly 10% as an analyst from Jefferies expects its psychosis treatment pimavanserin, which targets patients who have Parkinson's disease, to gain FDA approval. Following favorable data reported at a conference of neurologists last week, the company has already seen substantial gains recently, but even an application for approval could still be some months away.

Finally, Nordic American Tankers (NYSE:NAT) jumped more than 5% on favorable comments from much-followed analyst Jim Cramer last Friday night. Although the tanker company is arguably a speculative play based on an expected eventual rebound in the hard-hit shipping industry, especially given analyst expectations that the company will keep losing money at least through 2014, Nordic American does have a relatively clean balance sheet, giving it the ability to make smart strategic asset acquisitions as well as letting it sustain a substantial dividend yield approaching 6%.