Health care stocks jump after midterm elec­tions

Dems con­trol House; in­vestors see re­peal of Af­ford­able Care Act as un­likely

The Denver Post - - BUSINESS - By Mar­ley Jay

NEW YORK» The out­come of the midterm elec­tions was good for the stock mar­ket in general, mostly be­cause it didn’t pro­duce any big sur­prises, but it was es­pe­cially good for the health care in­dus­try and sev­eral other com­pa­nies.

Health in­sur­ers rose sharply Wed­nes­day as in­vestors an­tic­i­pated that any prospects of re­peal­ing the 2010 Af­ford­able Care Act, which ex­panded health in­sur­ance to mil­lions of Amer­i­cans, di­min­ished greatly now that Democrats con­trol the U.S. House of Rep­re­sen­ta­tives.

Mar­i­juana com­pa­nies soared after sev­eral states voted to partly le­gal­ize pot, oil and gas com­pa­nies ben­e­fited from the de­feat of a bal­lot mea­sure in Colorado that might have re­stricted drilling, and a dial­y­sis ser­vices com­pany rock­eted higher after Cal­i­for­nia vot­ers re­jected a mea­sure that would have capped the prof­its of dial­y­sis clin­ics.

Here’s a look at in­dus­tries and com­pa­nies that were af­fected in var­i­ous ways by the out­come of the elec­tion.

• Health care: Health in­sur­ers, hos­pi­tal op­er­a­tors and com­pa­nies that run Med­i­caid health pro­grams all jumped. The Democrats’ vic­tory in the House means Repub­li­cans won’t be able to pass leg­is­la­tion re­peal­ing the Af­ford­able Care Act, a goal for the GOP ever since the law was passed dur­ing Pres­i­dent Barack Obama’s first term. The bill ex­panded health in­sur­ance cov­er­age, and Tues­day’s elec­tion re­sults mean more sta­bil­ity for in­sur­ers and more re­im­burse­ment for hos­pi­tals.

Vot­ers in Idaho and Ne­braska ap­proved ex­pan­sions of the fed­eral-state Med­i­caid pro­gram, which pro­vides ben­e­fits to poor and dis­abled peo­ple. Win­ning gu­ber­na­to­rial can­di­dates in Maine and Kansas also sup­port ex­pand­ing Med­i­caid ben­e­fits to more peo­ple.

The largest U.S. health in­surer, Unit­edHealth, added 4.1 per­cent to $274.42 and An­them rose 6.3 per­cent to $289.27. The largest hos­pi­tal com­pany, HCA, gained 4.7 per­cent to $141.61. Med­i­caid ser­vices com-

pany Molina jumped 10.4 per­cent to $137.20.

• Mar­i­juana stocks: Vot­ers in Michi­gan passed a bal­lot mea­sure to le­gal­ize mar­i­juana, while a sim­i­lar mea­sure in North Dakota was de­feated. Mis­souri be­came the 31st state to ap­prove mar­i­juana for med­i­cal use, while Utah also voted on a med­i­cal mar­i­juana propo­si­tion.

The stocks built on their gains in the af­ter­noon after the res­ig­na­tion of At­tor­ney General Jeff Ses­sions.

Mar­i­juana re­mains il­le­gal in the U.S. at the fed­eral level, and Ses­sions had pro­moted more aggressive en­force­ment of those laws.

Til­ray soared 30.8 per­cent to $139.79, and Canopy Growth climbed 9 per­cent to $46.41.

• Dial­y­sis de­tails: Dial­y­sis ser­vices com­pany DaVita surged after Cal­i­for­nia vot­ers re­jected a bal­lot mea­sure that would have capped dial­y­sis clin­ics’ prof­its in an ef­fort to im­prove pa­tient care.

Propo­si­tion 8 would have lim­ited prof­its for dial­y­sis clin­ics that pro­vide vi­tal treat­ment for peo­ple whose kid­neys don’t work prop­erly.

Dial­y­sis com­pa­nies con­trib­uted $111 mil­lion to op­pose the bill, while pro­po­nents said it would stop com­pa­nies from cut­ting cor­ners to make more money and would force them to spend more of their money on car­ing for pa­tients.

DaVita gained 10.3 per­cent to $76.36.

• Frack­ing fall­out: Oil drillers Anadarko Petroleum and Noble En­ergy ral­lied after Colorado vot­ers re­jected a mea­sure that could have sharply re­duced oil and gas drilling, in­clud­ing the method known as frack­ing, by re­quir­ing new oil and gas wells to be far­ther from oc­cu­pied build­ings than al­lowed un­der cur­rent law.

Anadarko gained 5.8 per­cent to $57.95, and Noble picked up 4.5 per­cent to $28.26.

• Growth: Big tech and re­tail com­pa­nies made huge gains. The stocks aren’t ex­pected to ben­e­fit from any spe­cific vote or change in pol­icy, but with the midterm elec­tions over, in­vestors were will­ing to take big­ger risks and bet that the global econ­omy will keep grow­ing. Ama­zon jumped 6.4 per­cent to $1,748, and Mi­crosoft climbed 3.6 per­cent to $111.75.

Safer, stead­ier stocks gen­er­ally rose, but they didn’t do as well as the rest of the mar­ket.

Those stocks had surged in Oc­to­ber as the rest of the mar­ket strug­gled, but Wed­nes­day util­ity com­pany AES fell 2.4 per­cent to $15.63. Shop­ping mall op­er­a­tor Si­mon Prop­erty Group rose 1.6 per­cent to $186.81, but con­sumer prod­ucts maker Church & Dwight lost 2.6 per­cent to $66.15.

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