NEW YORK ( TheStreet) -- The Dow rallied to its highest close of 2010 Monday, the day after the House of Representatives approved landmark health care reform legislation.

The Dow Jones Industrial Average, which reached as high as 10,810 in intraday trading, closed up 44 points, or 0.4%, to 10,786. The S&P 500 tackeded on 6 points , or 0.5%, to 1166 and the Nasdaq added 21 points, or 0.9%, to 2395.

The big news Monday was the House's 219-212 vote ot pass the health care reform bill on late Sunday, which was lifting shares across the health care sector. President Barack Obama is set to sign the bill into law Tuesday.

Citi analyst Charles Boorady sees 13% higher enrollment in health insurance programs by 2019 and higher per-member premiums because of minimum benefit requirements beginning in 2014. He forecasts drug sales to be 4% to 6% higher by 2019 if 32 million more people are covered, beginning in 2014.

" Aetna ( AET) is among the least exposed to negative implications and is positioned to benefit from the newly insured. We expect Aetna and managed care stocks to reach 12 times forward earnings, 20% above the current price-to-earnings ratios on average," Boorady says.

Elsewhere, German Chancellor Angela Merkel showed resistance to the European Union providing financial aid to Greece .

Meanwhile, China's commerce minister warned the U.S. not to impose trade sanctions as retaliation for Beijing's currency controls .

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Overseas, Hong Kong's Hang Seng lost 2.1%, and Japan's Nikkei rose 0.8%. The FTSE in London lost 0.3%, and the DAX in Frankfurt fell 0.2%.

The Economy

Without any economic releases Monday, passage of the historic legislation aimed at overhauling the U.S. health care system captured the market's attention, as investors kept an eye on managed care and pharmaceutical stocks.

Stocks across the health care sector were among the session's strongest performers. Managed care stocks were mixed with Aetna and Cigna ( CI) up by 0.5% and 0.5%, respectively while UnitedHealth Group ( UNH) and Humana ( HUM) were down by 3.2% and 1.4%, respectively.

Pharmaceutical stocks Merck ( MRK) and Pfizer ( PFE) helped lead the Dow higher, along with DuPont ( DD), Boeing ( BA) and American Express ( AXP), with shares up 0.6%, and 1.4%, respectively.

The expected increase in insured patients also lifted hospital stocks . Tenet Healthcare ( THC), the biggest gainer on the S&P, added 9%, Health Management Associates ( HMA) rose 11.3% higher and Dynacq Healthcare ( DYII) added 8.9%.

SunLink Health Systems ( SSY), which provides health care services in rural markets, saw shares soar 37.7% to $2.19.

Medical device manufacturer Medtronic ( MDT) also improved 2.3% to $45.80.

With health care reform out of the way, Congress appears to be setting its sights on an overhaul of the financial industry. The Senate Banking Committee on late Monday voted 13-10, along party lines, to send a financial reform bill to the full Senate. Financial stocks showed strength, as the KBW Bank index advanced 1.1% Monday.

Semiconductor stocks also made strong gains as a group, surging 2.4% on the Philadelphia Semiconductor index. Lam Research ( LRCX), Novellus Systems ( NVLS) and Teradyne ( TER) surged over 4% each today.

SanDisk ( SNDK) announced plans to ship a 32 gigabyte memory card for smartphones, deeming it "the world's highest-capacity removable memory card for mobile phones" in a release. Shares leapt up 4.9% to $33.82.

Company News

Boeing was a top Dow performer, as its stock jumped $1.19, or 1.7%, to $71.91 on an upgrade to outperform from underperform at Oppenheimer.

Citigroup ( C) also benefited from an analysts' upgrade with shares up 4.1% to $4.06. Rochdale Securities analyst Dick Bove raised the stock to buy from neutral, citing the bank's improving loan losses and overcapitalized position.

Citigroup was the most traded on the New York Stock Exchange, which had a listed volume of 4.2 billion. The Dow saw volume of 157.2 million, compared with an average of 200.4 million.

Ford ( F) shares also saw heavy volume. The stock closed up 4.9% to $13.94.

Shares of specialty home-products retailer Williams-Sonoma ( WSM) soared 12.6%, to $27.19 on the company's fourth-quarter earnings beat.

Eldorado Gold ( EGO) reported record gold production in 2009, which was nearly 18% higher than the prior year. The stock fell off by 1.5%, at $12.63.

CS CSG, a 50/50 joint venture owned by Royal Dutch Shell ( RDS.A) and PetroChina ( PTR), agreed to buy all shares of Australia's Arrow Energy for roughly $3.2 billion. According to the joint venture, Arrow Energy's board recommended its shareholders to vote in favor of the proposal.

Shares of Tiffany ( TIF) edged up 8 cents, or 0.2%, at $47.33 after the company missed expectations despite a fourth-quarter profit that more than quadrupled.

In its ongoing standoff with the Chinese government, Google ( GOOG) shares bounded higher, but retreated at the closing bell, after the search firm began redirecting Chinese-language users at to the firm's uncensored Hong Kong site.

"We want as many people in the world as possible to have access to our services, including users in mainland China, yet the Chinese government has been crystal clear throughout our discussions that self-censorship is a non-negotiable legal requirement," David Drummond, Google's chief legal officer, wrote in a blog post. "We believe this new approach of providing uncensored search in simplified Chinese from is a sensible solution to the challenges we've faced; it's entirely legal and will meaningfully increase access to information for people in China. We very much hope that the Chinese government respects our decision, though we are well aware that it could at any time block access to our services."

Google shares finished lower by $2.50, or 0.5%, to $557.50.

E*Trade Financial ( ETFC) named Steven Freiberg, a former head of Citigroup's global consumer group, as its new chief executive.

PepsiCo ( PEP) confirmed its 2010-11 guidance. The stock shed 15 cents, or 0.2%, to $66.41.

Biogen Idec ( BIIB) steered clear of a proxy battle in announcing a third board member endorsed by financier Carl Icahn, though Icahn still sounded the virtue of splitting the company in an interview with Dow Jones Newswires. Shares added 19 cents, or 0.3%, to $59.82.

Commodities and the Dollar

In commodities markets, crude oil for May delivery traded 63 cents higher to settle at $81.60 a barrel while the April gold contract shed $8.10 to settle at $1,099.50 an ounce.

The dollar slipped against a basket of currencies, with the dollar index down by 0.2%.


The benchmark 10-year Treasury strengthened 9/32, diluting the yield to 3.661%.

The two-year note rose 2/32, lowering the yield to 0.973%. The 30-year bond gained 4/32, dropping the yield to 4.573%.

--Written by Melinda Peer and Sung Moss in New York.

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