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Sector Update: Health Care

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Healthcare stocks were rising Friday with the NYSE Healthcare Sector Index advancing 0.1% and shares of healthcare companies in the S&P 500 climbing 0.5% as a group.

In company news, RadNet Inc. ( RDNT ) rose Friday after the outpatient laboratory services company produced Q2 results that beat the Street view, fueled by an increased use of services by newly-insured clients.

RDNT shares recently were up more than 22% at $7.02 each, earlier rising to a session high of $7.24 a share. The stock has a 52-week range of $1.50 to $7.67 a share, more than doubling in value over the past year, up 121.5%.

The diagnostic imaging provider reported Q2 adjusted EPS of $0.12, up from $0.07 in Q2 2013 and beating analyst estimates of $0.05. Revenue rose 1.5% year over year to $179.08, also surpassing analyst projections by around $230,000.

The company also raised its outlook for FY14 revenue by $5 million over its prior guidance to a new range of $705 million to $735 million, topping the Capital IQ consensus by at least $4.55 million. It also boosted its forecast for adjusted FY14 EBITDA by $3 million to a new range of $115 million to $125 million.

"We continue to experience strong volumes, partially driven by participation of previously uninsured or underinsured individuals who are now enrollees of state run or privately managed healthcare exchanges," according to CEO Howard Berger. "We expect the current level of utilization of imaging services will continue for the remainder of 2014."

In other sector news,

(+) TKMR, (+38.1%) FDA removes full hold on the company's potential Ebola drug, allowing some patients to be treated with TKM-Ebola in limited experiments under a new regulatory partial hold.

(-) VOLC, (-24.7%) Reports Q2 net loss of $5.5 mln, or $0.10 per share, trailing expectations by $0.05 per share. Revenue of $102.6 mln also fell about $500,000 short. Oppenheimer downgrade to Market Perform from Outperform, cuts price target by $7 to $22 a share.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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