Health Care Edges Up as Device Makers Lead a Divided Session

On Wednesday, September 16, 51.8% of the graded weight in Health Care sat in companies graded A or B, providing steady footing during a split session. Breadth across the group was balanced, with 50.8% of stocks moving higher, while equal weighting produced +0.2% compared to the cap-weighted sector mark of +0.1%. Medical devices led the advance, with Edwards Lifesciences Corp (+4.2%) and Revvity Inc. (+3.9%) pacing gainers, while Humana Inc (-3.0%) dragged on the group. The Health Care Select Sector SPDR Fund (XLV), an exchange-traded fund that tracks the group, closed +0.1% at $167.78 on a day when 3 of the 11 sectors rose. The sector held its ground as the Federal Reserve raised interest rates by a quarter point, which pressured broader markets.

Edwards Lifesciences moved higher after executive commentary at an investor conference highlighted its structural-heart expansion beyond transcatheter aortic valves into newer therapy areas. Medical technology names also saw product developments, as Medtronic received regulatory clearance for its robotic vessel-sealing instrument, and GE HealthCare introduced a software platform to help hospitals forecast operating bottlenecks.

Pharmaceuticals and managed care faced crosscurrents. Novartis stopped development on an experimental treatment for amyotrophic lateral sclerosis after a mid-stage trial failed to meet primary goals. In public health efforts, Gilead Sciences widened its manufacturing agreements to broaden global distribution of a once-yearly HIV prevention injection. Meanwhile, managed care remained a soft spot for the sector, with Humana among the laggards on the day.

The fund holds $43.9 billion in assets with an expense ratio of 0.08%. Over longer windows, it is +0.4% over the past month and +22.5% over the past year. EasyAlpha grades stocks against their industry peers. Companies graded A or B have stronger fundamentals, and historically they have carried a lower risk of large drawdowns than companies graded D or E.