Apr. 2 - Summary of business headlines: Health insurance stocks power Dow and S&P 500 to fresh closing records after payment hike; Auto sales extend rise; Delta warns; HP cut to sell; SEC says companies can use social media for announcements. Conway G. Gittens reports.
The S&P 500 comes within reach of eclipsing its previous intra-day high set back before the financial crisis. But gains were trimmed, so the benchmark index settled with just a new closing high. The Dow set intra-day and closing highs. The Nasdaq was up as well. It was all about the health sector on Tuesday, more specifically, the health insurance companies. The sector dominated the top percentage gainers after the Obama White House reversed a plan to cut payment rates and instead boosted rates for the Medicare Advantage program. If the proposed cut had gone through, private Medicare insurance providers would have seen $11 billion in sales wiped away. Humana gets two-thirds of its revenue from the program - so no surprise that stock was up more than 5 percent. Other winners include UnitedHealth, Aetna, Cigna and Wellpoint. Stronger car sales - pointing to a resilient consumer. Monthly totals show annualized sales topping a healthy 15 million units for the fifth month in a row. On the flip side, Delta was grounded after cutting a sales growth forecast. The airline saw fewer last minute bookings from government-related travelers because of forced spending cuts in Washington. Delta shares tumbled 8 percent and United Continental and US Airways were down as well. Also down: Hewlett-Packard. It was cut to a sell rating at Goldman Sachs. The thinking there: the downturn hitting the PC industry will be deeper and longer than thought. Shares of HP - down over 5 percent to its lowest close since Mid-March. The SEC says companies can use social media websites like Facebook and Twitter to announce company info - just as long as they let investors know which social media site the information will be on. The ruling follows-up last year's controversy when Netflix made an announcement using its Facebook page. Europe's back - solid gains after holidays kept markets closed Friday and Monday.