Both the Dow Jones Industrial and the Standard & Poors 500 indexes made some major gains on Thursday, closing at record highs, as health insurer confidence grew on the heels of the Trump administration scrapping a plan that was supposed to help lower the price of prescription drugs. Also, bond yields helped prop my financial shares.
Indeed, it was the abandoned proposal that really worked magic on the market. The now-abandoned regulatory proposal would have required health insurers to pass on the billions of dollars they receive in rebates from drug makers to Medicare patients.
For example, UnitedHealth shares saw a bump of more than 5 percent after the White House slashed the proposal. CVS Health and Cigna also leaped forward by 4.7 percent and 9.2 percent, respectively.
The Dow Jones average broke 27,000 for the first time in the history of the 30-stock index, growing nearly 228 points (about 0.9 percent) to 27,088.08 on the day. The Dow’s previous breakthrough—26,000—was just last year, in January. Analysts say that this short duration between peaks was largely a result of expectations that the Fed will finally issue a rate cut, a move that will insulate the market from a slowing American economy that is still in a trade war with China.
In terms of Dow Jones performers, it appears that Microsoft leads the index, surging at nearly 50 percent around the time the index broke 26,000. Since then, Cisco Systems, Nike, and Visa have all taken a sharp upswing, too.
But the news also affected the Standard & Poors, which also posted a record close on Thursday, climbing 0.2 percent to 2,999.91. This is actually not its record high, as the S&P 500 traded above 3,000 for the first time, on Wednesday.
Of course, the other side of this saw drug maker stocks dive. Merck & Co Inc and Pfizer Inc, for example, both dipped from this. Merck ended the day down 4.5 percent; Pfizer slipped a total of 2.5 percent on the day. In addition, the Nasdaq biotech index was down 1.5 percent, with the S&P 500 healthcare index closed the day flat.