US STOCKS-Dow breaches 27,000; healthcare in spotlight after Trump's decision on rebate

* PBMs rise after White House kills rebate rule
* Biotechs, drugmakers drag on healthcare sector
* Fed's Powell resumes testimony before Congress
* Indexes up: Dow 0.74%, S&P 0.22%, Nasdaq 0.19%

(Updates to early afternoon)
By Medha Singh
July 11 (Reuters) - U.S. stocks rose on Thursday on improved
bets of an interest rate cut following Fed chief Jerome Powell's
dovish remarks, while healthcare stocks were mixed after the
Trump administration withdrew a rule that would kill rebates.
Shares of pharmacy benefit managers gained as the news meant
these companies would continue to benefit from after-market
discounts from drugmakers. Health insurers and drug distributors
also rose. A 5.16% gain in UnitedHealth Group Inc UNH.N helped the
Dow Industrials break above 27,000 points for the first time.
Cigna Corp CI.N surged more than 11%, leading gains in the S&P
500 index .SPX , while drug distributors such as McKesson Corp
MCK.N rose 1.2%. However, drugmakers such as Merck & Co Inc MRK.N and
Pfizer Inc PFE.N dropped at least 3% each and the Nasdaq
biotech index .NBI slipped 1.47%.
The lack of progress in Washington suggests that the
healthcare industry will face ongoing political pressure,
including legislative risks, Morgan Stanley analyst David
Risinger said in a note.
"We see no solution to the challenges drug manufacturers
face regarding growing rebates."
The healthcare index .SPXHC , which is the worst performing
S&P sector this year, was off 0.26%. Six of the 11 major S&P
sectors were higher.
Stock markets were also supported by dovish comments from
Powell, who on the first of his two days of testimony before
Congress said on Wednesday that the central bank stood ready to
"act as appropriate" to support record U.S. economic growth. He
began the second day of his testimony on Thursday. "It seems like they (Fed) are getting closer to a decision
point where they are more willing to openly communicate the
possibility or the likelihood of a rate cut and the market is
just taking that in," said Jason Pride, chief investment officer
of private wealth at Glenmede in Philadelphia.
At 12:51 p.m. ET, the Dow Jones Industrial Average .DJI
was up 197.97 points, or 0.74%, at 27,058.17, the S&P 500 .SPX
was up 6.58 points, or 0.22%, at 2,999.65 and the Nasdaq
Composite .IXIC was up 15.21 points, or 0.19%, at 8,217.74.
Iron Mountain IRM.N slumped 7.5% after Bank of America
Merrill Lynch downgraded the document storage company's shares
to "underperform", citing recent declines in recycled paper
pricing.
A Labor Department report showed U.S. underlying consumer
prices rose by the most in nearly 1-1/2 years in June, but that
was unlikely to change expectations the Fed would cut rates this
month.
Advancing issues outnumbered decliners by a 1.04-to-1 ratio
on the NYSE. Declining issues outnumbered advancers for a
1.19-to-1 ratio on the Nasdaq.
The S&P index recorded 43 new 52-week highs and three new
lows, while the Nasdaq recorded 70 new highs and 41 new lows.