College Stock: Penny Stock News

Written by Stephen Bernard and Tim Paradis, AP Business Writers, On Monday March 22, 2010, 1:14 pm.

Stocks rise after advance in health companies; Insurers, drug makers lead broad advance

Health stocks lifted the market Monday following House approval of an overhaul bill that would extend insurance to millions.

The Dow Jones industrial average rose about 60 points in afternoon trading. Broader indexes also climbed.

Investors had expected the health care bill would pass the House, but the approval late Sunday removed uncertainty about the rules that would govern the industry. A companion bill now goes back to the Senate. The changes could have far-reaching effects on health companies.

Hospital operators Tenet Healthcare Corp. and Health Management Associates Inc. each rose more than 8 percent.

Stocks opened lower following more doubts about Greece’s ability to repay its debt. Concern about the country’s fiscal crunch pushed investors into the safety of the dollar in morning trading. Stocks extended their gains after demand for the dollar eased.

Traders focused on health stocks because the bill passed by the House will extend benefits to 32 million uninsured Americans. That means increased business for insurers and drug makers. Many of the key points of the bill will not go into effect for several years.

“You’ve got some uncertainty here lifted,” said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. Ablin noted, however, that other industries will face higher costs to pay for wider coverage. “What it really comes down to is that as a result of this bill health care is a beneficiary at the expense of every other sector.”

Stocks have been rising steadily in recent weeks as investors grow more confident in an economic rebound following a string of economic reports that showed mild improvement.

In early afternoon trading, the Dow rose 59.78, or 0.6 percent, to 10,801.76. The Standard & Poor’s 500 index rose 6.96, or 0.6 percent, to 1,166.86, while the Nasdaq composite index rose 20.67, or 0.9 percent, to 2,395.08.

Bond prices rose, pushing down yields. The yield on the benchmark 10-year Treasury note fell to 3.67 percent from 3.70 percent late Friday.

The dollar was mixed against other major currencies. Gold fell.

Crude oil rose 52 cents to $81.20 per barrel on the New York Mercantile Exchange.

Major stock indexes dropped Friday because of renewed concerns about Greece. The Dow fell 0.3 percent, while the S&P 500 dropped 0.5 percent.

The latest concern about Greece is that the country might not get the outside financial support it has been seeking. The country’s debt woes have dragged down the market off and on for nearly two months as the country tries to cut its budget and is looking for outside support.

Questions about Greece arose again when Germany’s chancellor said Sunday that a bailout for Greece won’t be discussed at a European summit this week. Greece has said in recent days if other European countries do not provide support, it might turn to the International Monetary Fund for help.

Investors have been worried that Greece and other European nations that use the euro, like Spain and Portugal, could struggle to recover as they try to pay down steep debt. That could upend a global economic recovery.

Among health stocks, Tenet rose 48 cents, or 8.4 percent, to $6.23, while Health Management Associates rose 68 cents, or 8.8 percent, to $8.81.

Drug maker Pfizer Inc. rose 32 cents to $17.23, while insurer Aetna Inc. rose 26 cents to $34.72.

Energy and commodities stocks fell after the dollar rose in early trading. A stronger dollar makes commodities more expensive to foreign buyers. That erodes demand. Chevron Corp. fell 52 cents to $74.46, while Barrick Gold Corp. fell 19 cents to $39.23.

Three stocks rose for every two that fell on the New York Stock Exchange, where volume came to 464.5 million shares, compared with 954.9 million traded at the same point Friday. Trading was heavy Friday because of the expiration of options and futures contracts.

The Russell 2000 index of smaller companies rose 3.92, or 0.6 percent, to 677.81.

Overseas, Britain’s FTSE 100 fell 0.1 percent, Germany’s DAX index and France’s CAC-40 rose 0.1 percent. Japan’s Nikkei was closed for a holiday.