A late-hour sell-off took the shine off what looked to be a nice session for stocks Tuesday. The major indexes settled for pinched gains as volume rose.
The Nasdaq composite, up more than 0.6% at one point, closed up just 0.2%. The Nasdaq 100 did a little better, rising 0.3%.
The Dow Jones industrial average and the S&P 500 edged 0.1% higher after logging bigger gains earlier in the stock market today. The Russell 2000, still catching its breath after three straight weeks of huge gains, fell 0.1%.
UnitedHealth Group (UNH) led the Dow 30 components, soaring 3.6% to 157.59 and continuing its impressive rebound since resuming a rally past a 141.88 handle buy point on a nearly three-month base.
The managed care giant issued strong earnings and revenue guidance for 2017 just after President-elect Donald Trump on Monday named Georgia Congressman Tom Price as his health and human services Cabinet secretary to oversee the federal government's Medicare and Medicaid programs. Price is reportedly known for his anti-ObamaCare policy stance.
After the market's key follow-through on Sept. 1, 2010, UnitedHealth broke out of a fresh base at 33.89 and has since risen 365% — more than the 237% maximum gain achieved by Apple when it broke out that same month six years ago.
The Street currently sees UnitedHealth's profit rising 24% to $8.01 this year and 14% to $9.14 in 2017.
UnitedHealth weighs in at $150 billion in market value, a fraction of Apple at $594 billion. Yet UnitedHealth's proprietary IBD rankings, as seen in IBD's diagnostic tool Stock Checkup, are much stronger than its tech peer for now, including a group-leading 88 Composite Rating out of a maximum 99 (vs. a 47 for Apple), an 83 for Relative Strength and a B+ for Accumulation/Distribution.
An Accumulation grade of C+ or higher hints at net institutional buying in the stock over the past 13 weeks.
UnitedHealth's recent rally is affirmed by solid moves in the Medical-Managed Care group.
Aetna (AET) ran up nearly 3% to 132.03 on Tuesday, extending recent gains. The insurance giant is now up 8% past an 121.70 early buy point within a nearly five-month cup-like pattern. EPS growth is expected to accelerate in 2017 at 9% vs. a 4% jump expected this year.
Humana (HUM), another fellow large cap play with a market value of $31.3 billion, rose 2% to 210 in fast trading and has gained 9.5% since surpassing a 191.75 entry within an unusual-looking four-month consolidation. The provider of health insurance to the military and civilian consumers sports an outstanding A+ Accumulation grade according to IBD Stock Checkup.
Meanwhile, other top stocks are still in bases. They include NetEase (NTES) and GrubHub (GRUB), ranked No. 9 and 10, respectively, in the current IBD 50. However, both stocks are swimming below their 50-day moving averages.
A leading growth stock tends to break out after rising above its 50-day line, not trading below it. Such action indicates that the stock has been making stronger-than-usual price gains in the near term.
GrubHub, the leader in online and mobile-based food ordering, has been working on the right side of a potential cup base since reversing lower in above-average turnover on Sept. 29.
Both stocks show Composite Ratings of 90 or higher, as seen in IBD Stock Checkup.
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