Market Minute: HMO Stocks Rise on Medicare Advantage News

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The Humana Inc. headquarters office stands in Louisville, Kentucky, U.S., on Friday, July 13, 2012. Humana Inc., a managed health care company, offers coordinated health care through health maintenance organizations, preferred provider organizations, point-of-service plans, and administrative services products. Photographer: Ty Wright/Bloomberg via Getty Images
Ty Wright/Bloomberg via Getty Images
Produced by Drew Trachtenberg

The Dow and the S&P 500 retreated yesterday from record highs. The Dow edged lower by five points, the S&P lost seven and the Nasdaq fell 28 points.

Shares of health insurance provider Humana (HUM) jumped yesterday and are set to gain more today. This follows an apparent change of course by Medicare, which is now calling for an increase in reimbursement rates on its Advantage plans. UnitedHealth (UNH), Aetna (AET) and Wellpoint (WLP) are also on the rise.

Another supporter falls off of the Apple (AAPL) bandwagon. Goldman Sachs (GS) dropped Apple from its conviction buy list, and lowered its price target on the stock. But Goldman still expects Apple to hit 575 dollars a share within the next 12 months. It's now around 429 a share.

A former Anheuser-Busch (BUD) employee claims the company has filed suit against him in order to silence him. The employee charged last week that the company is selling watered-down beer. Anheuser-Busch rejects those allegations.

The major automakers report domestic sales for March, and analysts are looking the recent strong sales trend to continue. Edmunds expects the best annual sales rate in almost six years. Yesterday, General Motors (GM) launched a new front in its battle with Ford over pick-up trucks. GM claims its Sierra and the soon-to-be released 8-cylinder Silverado get better gas mileage than Ford's top-selling F-150.

Verizon (VZ) and AT&T (T) are reportedly working on a plan to break-up Vodaphone. According to a Financial Times blog, Verizon would acquire the U.S. assets and AT&T would take the overseas assets. The deal would value Vodaphone at 245-billion dollars.

And shares of Nuance Communications (NUAN) are set to rally on word that billionaire investor Carl Icahn has taken a nine percent stake. It's described as a passive stake, which means he's not seeking a takeover of the speech recognition firm.


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