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(Bloomberg) – Healthcare stocks posted their best monthly gain since April 2020 as investors sought refuge in a declining economy.

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The S&P 500 health care index rose 9.6% in October, its best month in two and a half years and beating the 8% rise in the highest benchmark index. Hospital operator Universal Health Services Inc. — which just wrapped up its best week on record — and diabetes device maker Dexcom were among the top performers, pushing the sector higher.

The gains come as investors seek safe havens amid rising interest rates and a looming recession. Pockets of the healthcare industry, from insurers to big drugmakers, tend to do well in downturns because demand for their services isn’t influenced by the economic outlook.

While eliminations of top tech stocks grabbed headlines, earnings beats in healthcare were rewarded more than any other sector, according to Goldman Sachs group strategist Asad Haider.

He said the defensive appeal of health care and outflows from other sectors, including technology indicators, were helping to strengthen stocks. Disappointing earnings for tech companies contrast with beats and increases from Biogen Inc., Gilead Sciences Inc., Merck & Co. Inc. and others, Haider wrote in a note to clients dated Friday.

The group has charged higher over the past four weeks, its longest weekly winning streak since December 2021.

And more revenue reports are coming soon. The best performers in health this year are drug distributors McKesson Corp., which is expected to report earnings on Tuesday after a 57% rally this year, and Cardinal Health Inc., which is expected to share results on Friday after a 47% gain %.

Several large-cap drugmakers and managed-care companies are trading near all-time highs, including Eli Lilly & Co. ahead of an earnings report on Tuesday, and Humana Inc., which is expected to report on Wednesday. Cigna Corp., UnitedHealth Group Inc. and Elevance Health Inc. are also around record highs.

The sector was virtually unchanged on Monday, while the S&P 500 index closed down 0.8%.

Not all healthcare stocks are making progress, and with the sector still down around 5.9% this year, the group is on course for its first annual decline since 2016. Dollar strength and exchange rates Headwinds hurt sector sales while negative results report. plunged device maker Edwards Lifesciences Corp. and the manufacturer of Invisalign Align Technology Inc.

Still, the impact of FX as well as rising interest rates should be factors well understood by investors by now.

“Large-cap healthcare should perform more as an S&P component, as many risks appear generally well priced and business variability is manageable compared to other sectors,” wrote healthcare strategist Jared Holz. health at Oppenheimer Holdings.

(Updates until market close.)

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