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Quarter-End Insights

Our Outlook for Health-Care Stocks

Health-care reform and mega-mergers dominate the news.

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In contrast to the fourth quarter of 2008 when health-care stocks took a nose-dive along with the rest of the market, industry-specific developments were the main catalyst for the sector's largely negative performance in the first quarter of 2009. Two main themes dominated: health-care reform and the mega-merger activity in the pharmaceutical area. The news on the regulatory front carried particular significance, as the message sent by the Obama administration was clear: Health-care reform would not take a back seat to the economic crisis, and the system could undergo a significant overhaul as early as next year.

Alex Morozov does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.