(Health care story updated for market close on Tuesday)

WASHINGTON D.C. ( TheStreet) -- President Obama signed health care reform into law at a White House ceremony shortly before noon on Tuesday, but the photo op didn't help extend the recent rally in health care stocks.
President Obama

On Monday, hospital operators and Medicaid-focused health care providers posted big gains, led by Tenet Healthcare ( THC - Get Report), Health Management Associates ( HMA), Centene ( CNC) and HMS Holdings ( HMSY - Get Report). Many health-care-related names set new 52-week highs.

During Tuesday's session -- even as Obama looked more relaxed than in recent weeks as he basked in his victory -- investors were taking some of the short-term froth off the sector's recent gains.

The Dow Jones U.S. Health Care Index was marginally positive (about 0.4%) on Tuesday.

Shares of MedCath ( MDTH), which had rallied last week after an analyst upgraded the hospital operator on news that it would sell off its hospital assets, suffered the largest decline Tuesday, falling 1.7% at the close on Tuesday, and after hours trading in MedCath shares was nearing a double digit decline on Tuesday.

Shares of Health Management, meanwhile finished slat on Tuesday, after big gains on Monday. Community Health Systems ( CYH) finished down 1.9% on Tuesday, while Lifepoint Hospitals ( LPNT) was down marginally on Tuesday.

On Monday, Lifepoint, Community Health and Universal Health Services ( UHS) all rose by about 6% and all touched 52-week highs intraday.

Among health care service providers, HMS Holdings saw its share prices slip 2.6% on Tuesday afternoon, while Centene, and Amerigroup ( AGP) recovered after Tuesday morning declines to post marginally positive gains by the close on Tuesday.

JPMorgan indicated in note Monday that Amerigroup, Centene and Molina Healthcare ( MOH) were among the Medicaid providers that would benefit from the reform effort becoming law. Molina shares fell 0.5% on Tuesday. -- Reported by Eric Rosenbaum in New York


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