UnitedHealth and Johnson & Johnson Upgrades Lead the Dow's Rally

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Strong economic data and a few timely market moves have helped the Dow Jones Industrial Average  jump toward another record, up more than 110 points as of 2:30 p.m. EST, with most of the index's blue-chip member stocks in the green. Health care's had the biggest reason to celebrate today, with both UnitedHealth Group and Johnson & Johnson receiving timely upgrades that have propelled the two stocks to the top of the Dow leaderboard. Let's catch up on what you need to know.

The economy picks up steam
The broader economy kicked things off for the Dow earlier today, as new figures show the U.S. trade deficit fell by 13% in November from October, plunging below economist expectations in the process. That's good news for the overall U.S. economy, indicating more activity for American companies -- either through less business from overseas competitors in the U.S. or via more sales by domestic companies abroad. Either way, it's a step in the right direction for the economy's continued resurgence.

Health insurance stocks have had a big day across the market as Obamacare continues to pick up speed. So far, more than 2.1 million Americans have signed up for insurance through the new Affordable Care Act exchanges. That is still below administration estimates, but a far cry from the dismal numbers seen in the first month or two after the law's rollout.

UnitedHealth's making the most of insurance's surge today, as the stock has jumped more than 3.7% to lead the Dow by a huge margin. UnitedHealth picked up an upgrade from Deutsche Bank today, which raised its opinion on the stock to buy from hold. Deutsche cited UnitedHealth's more cautious embracing of Obamacare, especially in comparison to rivals that have approached the law in a more open fashion.

UnitedHealth hasn't been shy about its wariness of the new law: The company only elected to participate in a handful of state individual insurance exchanges, fearing that spiking costs could outweigh any revenue gains. That's a well-founded fear considering how UnitedHealth's own medical costs have outpaced premium revenue in terms of growth over the last reported nine months on a year-over-year basis. With more Americans now having insurance in the new year, insurance investors should keep a close eye on how costs start to mount at their favorite companies.

Johnson & Johnson's also riding the upgrade train today, as RBC Capital Markets moved the diversified health care stock from sector perform to outperform. J&J's been a good pick for investors over the years and didn't disappoint in 2013's rally, and RBC noted that the company's increasingly strong pharmaceutical division could help grow operating margins at the firm.

Indeed, drugs have become the staple of J&J as the company's medical device and consumer health divisions have seen growth slow. Meanwhile, tried-and-true drugs like immunology standout Remicade continue to serve as cash cows for this blue-chip health care king, while up-and-coming drugs like type 2 diabetes medication Invokana have Johnson & Johnson investors excited about a bright future. Johnson & Johnson's a company that reaches over many niches in the health care sector, but despite its breadth, this is one stock that has plenty of potential to run higher in 2014.