By Polya Lesova, MarketWatch

NEW YORK (MarketWatch) -- U.S. stocks rose on Tuesday, as health insurers rallied on positive news about Medicare reimbursement rates and as data showed a rise in U.S. factory orders in February.

The Dow Jones Industrial Average (DJI) gained 80.39 points, or 0.6%, to 14,653 in morning trade, led by UnitedHealth Group Inc. (UNH), which rallied nearly 8%.

UnitedHealth and other insurers surged after the Centers for Medicare and Medicaid Services announced after the closing bell Monday that they will be boosting Medicare Advantage reimbursement rates, rather than cutting them as initially proposed. Shares of Humana Inc. (HUM) rose 9% on Tuesday, even as the company warned of other challenges.

Also in the sector, Cigna Corp. (CI) gained 5.2% and Aetna Inc. (AET) rallied 4.3%.

The S&P 500 index (SPX) climbed 10 points, or 0.6%, to 1,572, with healthcare posting the biggest gains and materials the only decliner among its 10 major sectors.

Hewlett-Packard Co. shares (HPQ) slumped 5% after Goldman Sachs downgraded the high-tech giant to sell from neutral.

The technology-heavy Nasdaq Composite index (RIXF) rose 25.6 points, or 0.8%, to 3,264.

Shares of Apple Inc. (AAPL) gained 1.4%. Analysts at Goldman Sachs removed the stock from their U.S. conviction list, but maintained a buy rating on the consumer-electronics maker. Apple shares sank Monday as the company apologized after coming under criticism in China for customer-service policies.

In economic news Tuesday, the Commerce Department reported factory orders rose 3% in February, in line with expectations.

Wall Street saw pressure Monday after the Institute for Supply Management's factory index unexpectedly declined in March, although it remained in positive territory. While jobs data due Friday will be the main event of the week, investors may take some cues from Tuesday data.

"Despite some weak manufacturing data from the U.S., equities are attracting some investors this morning as we get [the second quarter] under way," said Mike McCudden, head of derivatives at stockbroker Interactive Investor in London. "We do, however, expect shares to wax and wane throughout the remainder of the week as investors grow nervous in the run up to the U.S. jobs number on Friday," he said.

Car makers were also in the spotlight as they reported March sales figures. Edmunds.com raised its 2013 forecast for U.S. light vehicle sales to 15.5 million, signaling optimism about the industry.

Ford Motor Co. (F) said its U.S. sales rose 5.7% in March and Chrysler Group LLC, which is owned by Italy's Fiat SpA , said its U.S. sales climbed 5% in March from the same period a year ago, marking the best monthly sales since December 2007.

General Motors Co. (GM.XX) said its March U.S. sales rose 6.4%.

Shares of interdealer broker BGC Partners Inc. (BGCP) soared nearly 44% after Nasdaq OMX Group Inc. (NDAQ) agreed to acquire the firm's electronic Treasurys marketplace in a cash-and-stock deal valued at as much as $1.23 billion. Shares of Nasdaq OMX, however, fell nearly 10%, making the stock the biggest loser in the S&P 500.

European equities traded higher, with the Stoxx 600 Europe index rising 1%, shaking off data that showed the number of unemployed people in the euro zone hit a record in February, while a final euro-zone manufacturing purchasing managers' index confirmed the sector's downturn deepened in March.

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(END) Dow Jones Newswires

04-02-13 1017ET