Health care leads as a SpaceX deal splits the carriers from the towers

Health care led the eleven US sectors on Friday, while a SpaceX deal for mobile spectrum sent wireless carriers lower and tower owners higher. Only communications and energy fell. The S&P 500 and the State Street SPDR S&P 500 ETF, ASPY, both rose 0.6%.

A wide gain in health care

The State Street Health Care Select Sector SPDR ETF, AXLV, rose 1.6%. The rise was spread across the fund.

Johnson & Johnson, a 10% holding that gained 1.9%, added the most. Moderna, about 1% of the fund, rose 14.2% and added nearly as much.

Merck rose 2.3%, and Eli Lilly, the fund's largest holding, rose 0.8%. They were the next largest additions to the fund.

Moderna closed at $225, a one-year high, after the New York Times reported that the National Institutes of Health is planning a public-private effort to speed cancer vaccines.

Stacey Adam, a senior clinical officer at the NIH's foundation, told the Times she expects the program to launch in December.

Humana rose 11.3%. It is about 0.8% of the fund, so the jump did little for the fund.

Medicare Advantage is the private-plan version of Medicare. Humana said 95% of its Medicare Advantage members will be enrolled in plans rated four stars or higher for 2027, up from 20% for 2026. Analysts at J.P. Morgan had expected 60% to 70% of members in the higher-rated plans.

Only a plan rated four stars or higher qualifies for a quality bonus from the government. Evercore ISI analyst Elizabeth Anderson said Humana could receive $4.8 billion in those payments in 2028.

Carriers down, tower owners up

The State Street Communication Services Select Sector SPDR ETF, AXLC, fell 1.5%. AT&T, Verizon and T-Mobile, about 13% of that fund, fell 9.8%, 8.7% and 13.3%. T-Mobile touched a one-year low.

Meta, the fund's largest holding, barely moved. Alphabet's two share classes, together about 22% of the fund, rose about 1%, and that was not enough to offset the carriers.

On Thursday, Grain Management, an investment firm that specializes in digital infrastructure, including wireless spectrum, agreed to sell SpaceX its nationwide portfolio of 800 megahertz spectrum. That is the low-band kind, which travels farther and passes through walls.

The sale still needs Federal Communications Commission approval. The Wall Street Journal reported a price of about $8 billion in cash.

Grain said the spectrum would let Starlink Mobile, SpaceX's satellite-to-phone service, reach customers from the ground as well as from space. Grain had bought the portfolio from T-Mobile in August.

"We believe the Grain transaction is a clear sign that SpaceX is going to be a more aggressive acquirer of spectrum," Morgan Stanley's analysts wrote.

Any threat to the carriers, they added, is likely to arrive gradually, and first in rural markets.

Tower owners moved the other way. They own the towers and lease the space on them, so they count as real estate, not as carriers. Crown Castle rose 15.6%, American Tower 9.3% and SBA Communications 7.3%.

Bernstein said the deal keeps the option of a SpaceX ground network "very much alive." A ground network would make SpaceX a new tenant for the tower owners. Buying the spectrum, Bernstein added, is not a commitment to build.

American Tower and Crown Castle are about 7% of the Vanguard Real Estate ETF, AVNQ. The fund gained 1.5%, second among the sectors.

Those two holdings supplied more than half of that gain.