Apr 8, 2013 23:10 Health insurers power market gains Health insurers power market gains Auto sales, factory orders also increase DANIEL WAGNER| AP business writer April 08, 2013 Comments The Dow Jones industrial average closed at a record high Tuesday after reports on auto sales and factory orders provided the latest evidence that the U.S. economy is strengthening. Orders to U.S. factories rose 3 percent in February, the best gain in five months, the government said after trading began. The increase was driven by a surge in demand for commercial aircraft, an especially volatile category. Traders plowed money back into European stocks as the financial situation in Cyprus appeared to stabilize. Health insurers powered the gains a day after the government released revised reimbursement rates for Medicare Advantage plans. The new numbers suggest that funding cuts will be less severe than analysts and companies had feared. The Dow closed up 89.16 points, or 0.6 percent, at 14,662.01. It had risen as high as 14,684 in the late morning. The Standard & Poor’s 500 index rose 8.08 points, or 0.5 percent, to 1,570.25. It rose to within two points of its trading high of 1,576 reached on Oct. 11, 2007. Health care stocks rose the most of the 10 sectors in the S&P 500 index, adding 1.4 percent. The sector is up 17.1 percent this year. Gains in European markets boosted confidence among U.S. investors. While European markets were closed for four days for the Easter holiday, many traders feared that Cyprus’ precarious financial situation would worsen. But no bad news materialized. Instead, Cyprus’ international lenders agreed to extend until 2018 its deadline for meeting key budget targets. Airline stocks fell sharply after Delta Air Lines Inc. said a key measure of revenue was hurt last month by government spending cuts, a technical glitch and attempts to get passengers to pay more. The industry dragged the Dow Jones transportation average down 1.2 percent. For the second day in a row, small stocks underperformed the market. The Russell 2000 index of small-company stocks fell 4.49 points, or 0.5 percent, to 934.30. The Russell had risen more than large-company indexes in the first quarter, gaining 12 percent versus 11.3 percent for the Dow and 10 percent for the S&P. The Nasdaq composite rose 15.69, or 0.5 percent, to 3,254.86. In other news: HEWLETT-PACKARD: It plunged after a Goldman Sachs analyst downgraded the stock, predicting the company’s earnings will be weak. Shares fell $1.21, or 5.2 percent, to $22.10. FANNIE MAE: Fannie Mae, the mortgage giant that nearly collapsed five years ago, has earned its biggest yearly profit. Fannie Mae earned $17.2 billion last year and paid dividends of $11.6 billion to the U.S. Treasury. URBAN OUTFITTERS: It climbed a day after the clothing and accessories company said sales at stores open at least a year have grown in the high single digits in the first two months of the fiscal quarter started Feb. 1. The stock rose $1.46, or 3.8 percent, to $39.87. VODAFONE: Verizon Communications Inc. has denied a report that it’s looking to partner with AT&T Inc. to buy Vodafone Group PLC, the British cellphone company that owns 45 percent of Verizon’s wireless business. APPLE: Apple is set for a possible summer launch of the next iPhone, rather than a fall launch like the last two models, according to a report Tuesday in The Wall Street Journal. ZYNGA: Dan Porter is leaving Zynga a year after the online game maker bought his company, OMGPop, for $183 million.