With the election out of the way, investors were on the prowl for stocks that stand to benefit under President Obama's health care reform law.
Shares of major hospital operators rallied Wednesday as investors bet that the Affordable Care Act, popularly known as Obamacare, will boost those companies' bottom lines.
HCA Holdings (HCA), which operates 163 hospitals across the country, was up 7%. Investors also bid up shares of LifePointHospitals (LPNT), Health Management Associates (HMA), Tenet Healthcare (THC), Community Health Systems (CYH) and Vanguard Health Systems (VHS).
The law is expected to expand coverage to millions of patients, who would otherwise seek treatment at hospitals without any health insurance. Under the new law, hospitals will treat fewer patients who can't pay, which should help bolster their profits. CNNMoney had previously identified hospital operators as a potential winner if Obama were to be elected for a second term.
Meanwhile, investors punished shares of insurance companies that provide health care coverage, which will face new competition as the law is phased in over the next few years.
Hedge fund manager Dan Loeb, once a supporter of President Obama, is now a critic. But he appears to think the president's health care plan will be a boon for health insurers. And he's not alone.
Loeb and noted short seller David Einhorn accumulated new positions in multiple health insurance stocks at some point in the second quarter, according to SEC filings released Tuesday.
Both Loeb's Third Point Capital and Einhorn's Greenlight MOREMaureen Farrell - Aug 15, 2012 3:26 PM ET
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