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Dow breaches 27,000 points for the first time; healthcare in spotlight

Dow breaches 27,000 points for the first time; healthcare in spotlight

Reuters
new york
US stocks rose on Thursday on improved bets of an interest rate cut following Fed chief Jerome Powell’s dovish remarks, while healthcare stocks were mixed after the Trump administration withdrew a rule that would kill rebates.
Shares of pharmacy benefit managers gained as the news meant these companies would continue to benefit from after-market discounts from drugmakers. Health insurers and drug distributors also rose.
A 5.16 percent gain in UnitedHealth Group Inc helped the Dow Industrials break above 27,000 points for the first time. Cigna Corp surged more than 11 percent, leading gains in the S&P 500 index, while drug distributors such as McKesson Corp rose 1.2 percent.
However, drugmakers such as Merck & Co Inc and Pfizer dropped at least 3 percent each and the Nasdaq biotech index slipped 1.47 percent.
The lack of progress in Washington suggests that the healthcare industry will face ongoing political pressure, including legislative risks, Morgan Stanley analyst David Risinger said in a note.
“We see no solution to the challenges drug manufacturers face regarding growing rebates.” The healthcare index, which is the worst performing S&P sector this year, was off 0.26 percent. Six of the 11 major S&P sectors were higher.
The Dow Jones Industrial Average was up 197.97 points, or 0.74 percent, at 27,058.17, the S&P 500 was up 6.58 points, or 0.22 percent, at 2,999.65 and the Nasdaq Composite was up 15.21 points, or 0.19 percent, at 8,217.74.
Iron Mountain slumped 7.5 percent after Bank of America Merrill Lynch downgraded the document storage company’s shares to “underperform”, citing recent declines in recycled paper pricing.
A Labour Department report showed US underlying consumer prices rose by the most in nearly 1-1/2 years in June, but that was unlikely to change expectations the Fed would cut rates this month.
Advancing issues outnumbered decliners by a 1.04-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.19-to-1 ratio on the Nasdaq.
The S&P index recorded 43 new 52-week highs and three new lows, while the Nasdaq recorded 70 new highs and 41 new lows.

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