Managed care stocks gain ground on earnings sentiment, health care reform debate

[Joanne98]

Source: AP

NEW YORK (AP) -- Shares of health insurance companies gained ground Tuesday following positive financial reports and outlooks amid the continued debate over health care reform in Congress.

Bethesda, Md.-based Coventry Health Care Inc. gained $2.58, or 12.9 percent, to reach $22.63 in afternoon trading after the company's adjusted second-quarter profit met Wall Street expectations and Coventry raised its full-year profit outlook.

Meanwhile, shares of St. Louis-based Centene Corp. gained $1.45, or 8.1 percent, to reach $19.43 on a 11 percent boost in second-quarter profit, with membership gains.

Hartford, Conn.-based Aetna Inc. gained some ground as analysts looked on the bright side of the insurer's lowered profit outlook. The company cut its outlook for the second time since June on Monday and said its second-quarter profit sank 28 percent, as medical costs rose faster than it expected.

On Tuesday, shares rose $3.25, or 12.6 percent, to $28.97 in afternoon trading.

"While there's nothing positive to say about Aetna's overall performance in the second quarter, the material guidance revision should reduce the anxiety levels associated with owning the stock," said Deutsche Bank-North America analyst Scott Fidel, reaffirming a "Buy" rating. "The margin targets for the second half of 2009 are now much more modest and the new earnings per share guidance range appears achievable."

The continued debate in Congress over health care reform has also been affecting shares of health insurers. A weight may have been lifted temporarily as a Senate group potentially discusses excluding a government insurance option from the plan.

Elsewhere, shares of Indianapolis-based WellPoint Inc. gained $2.24, or 4.3 percent, to $54.38. The company reports second-quarter results Wednesday. Shares of Philadelphia-based Cigna Corp. advanced $2.02, or 7.6 percent, to $28.46 and is scheduled to report financial results Thursday.

Shares of Minnetonka, Minn.-based UnitedHealth Group Inc. rose $1.45, or 5.3 percent, to $29.07 while shares of Louisville, Ky.-based Humana Inc. picked up $1.93, or 6.2 percent, to $32.98.


Read more: http://finance.yahoo.com/news/Sector-SnapManaged-apf-1207856513.html?x=0&.v=1

[Gman]

1. THIS IS WHY they are fighting reform tooth and nail

and will do anything they can, legal or illegal, immoral or unethical to lie, cheat, and steal their way to keeping us from having a health care system that works.

[bluesmail]

2. I wonder how much was a manipulation from the super-fast

computers. (Yes it's manipulation). I wonder what other kinds of factors of manipulation are in use.

[Lucky Luciano]

4. false

Fundamental news will dominate the pennies of advantage that an ultra-HF trading shop can extract.

These companies did have the shit beat out of them in the last year, so they are recovering a bit as beaten down companies do when "good news" (for them) comes out.

[leahcim]

3. Managed care stocks

Oil company stocks go up if the price of oil is perceived to be likely to go up in the future. Insurance company stocks go up if the price of insurance is likely to go up in the future.

Investors are saying, "the public option would lower the price of health insurance; It being off the table will raise the price of health insurance". It's as simple as that.