Health shares rose Tuesday as traders considered the prospect that a Republican victory in the special Senate election in Massachusetts could jeopardize the health reform legislation. The Boston Globe reports that "traders placed bets that the outcome of an election in Massachusetts would make it harder for President Obama to overhaul health care. ... Rising health care stocks led the market higher as the prospect of a logjam in Washington eased concerns that profits at companies like insurers and drug makers would suffer" (Paradis, 1/20).
BusinessWeek/Bloomberg: "The potential demise of the legislation cheered investors who feared the plan may limit revenue in the health-care industry, said Takeru Ogihara, who helps oversee $27 billion as chief strategist at Mizuho Trust & Banking Co., in a telephone interview from Tokyo." Although the legislation could add millions of customers for health care businesses, analysts said it also "carried the risk of higher fees, increased regulation and narrower profit margins, said Paul Keckley, executive director of the Deloitte Center for Health Solutions, a Washington-based research group. Health-care companies in the MSCI Asia Pacific Index rose 1.4 percent as a group, the largest advance among 10 industries. Takeda Pharmaceutical Co., Asia's biggest drugmaker, and Astellas Pharma Inc., which derives 24 percent of revenue from North America, both climbed. In Europe, GlaxoSmithKline Plc of London and Sanofi-Aventis SA of Paris, which get 40 percent and 31 percent of sales, respectively, in the U.S., led gains. (Nussbaum and Tirrell, 1/20)