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Obamacare stocks rally

November 7, 2012: 11:00 AM ET

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.

Humana (HUM) fell 6% in early trading. Aetna (AET), UnitedHealth (UNH), WellPoint (WLP), Cigna (CI) and Coventry (CVH) were also under pressure.

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Ben Rooney
Ben Rooney
Staff writer, CNNMoney

Ben Rooney is a staff writer for CNNMoney. He covers the European debt crisis and other international finance stories, in addition to writing about stocks, bonds, investing and other Wall Street-related news. Follow Ben on Twitter: @ben_rooney

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