US STOCKS-Dow tops 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
* Delta Air gains on strong quarterly profit, lifts rivals
* Fed's Powell to resume two-day testimony at 10:00 a.m. ET
* Indexes up: Dow 0.68%, S&P 0.22%, Nasdaq 0.14%

(Changes comment, adds details; Updates prices)
By Medha Singh
July 11 (Reuters) - U.S. stocks edged higher 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 drugs
distributors also rose. A 5.5% gain in UnitedHealth Group Inc UNH.N helped the Dow
Industrials briefly break above 27,000 points for the first
time. Cigna Corp CI.N surged more than 12%, leading gains on
the S&P 500 .SPX , while drug distributors such as McKesson
Corp MCK.N rose 2.2%. However, drugmakers such as Merck & Co Inc MRK.N dropped
3.1% and the Nasdaq biotech index .NBI slipped 1.66%.
The lack of progress in Washington suggests that the
(healthcare) industry will face ongoing political pressure,
including legislative risk, Morgan Stanley analyst David
Risinger said.
"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 flat.
Stock markets were also supported by dovish comments from
Powell, who began his second day of testimony before the
Congress. He said on Wednesday that the central bank stood ready
to "act as appropriate" to support record U.S. economic growth.
"Powell has telegraphed that they (Fed) are willing to
accommodate the market as necessary and that's very supportive,"
Brian Larose, technical analyst at ICAP in Jersey City.
At 11:21 a.m. ET the Dow Jones Industrial Average .DJI was
up 183.33 points, or 0.68%, at 27,043.53, the S&P 500 .SPX was
up 6.56 points, or 0.22%, at 2,999.63 and the Nasdaq Composite
.IXIC was up 11.66 points, or 0.14%, at 8,214.19.
Delta Air Lines Inc DAL.N rose 1.3% after reporting a
39.3% rise in quarterly profit, as the carrier benefited from
higher fares and flying fuller planes. This comes a day after American Airlines Group Inc AAL.O
raised its estimate for second-quarter unit revenue. The S&P
1500 airlines index .SPCOMALI rose 0.39%.
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.
Declining issues outnumbered advancers for a 1.19-to-1 ratio
on the NYSE and a 1.49-to-1 ratio on the Nasdaq.
The S&P index recorded 34 new 52-week highs and three new
lows, while the Nasdaq recorded 57 new highs and 32 new lows.