WASHINGTON (Reuters) - Drugmakers, insurers and other healthcare-related companies will listen to President Barack Obama's annual speech to Congress for signs of life in his Obama's State of the Union speech on Wednesday night (9 p.m. EST/0200 GMT) is expected to largely focus on jobs and the economy as his Democratic party regroups after losing a crucial Senate seat.
Industry experts and company executives hope Obama's speech will offer hints as to whether he wants Democrats in Congress to press ahead, back off or try to work with Republicans on health care reform.
Democratic leaders have pledged to move forward with that reform, but it is unclear how they will do that.
Shares of healthcare companies have fluctuated since Republican Scott Brown won an election last week to replace the late Massachusetts Democratic Senator Edward Kennedy.
Brown's election casts a shadow on the fate of healthcare reform legislation, which Kennedy supported.
Before that election, House and Senate Democrats had planned to merge the chambers' bills into one version that could be passed and sent to Obama.
Both the House and Senate bills would impose tough rules on insurers while creating 30 million potential customers with insurance to pay for medicine, doctor visits and other care.
"It's the uncertainty," said Capital Alpha Partners healthcare analyst Kim Monk.
She said investors are uneasy taking positions in healthcare stocks until they know if Democrats will press ahead or pull the plug on reform.
Monk and other analysts said that without clarity from Obama, shares of companies in the sector would likely decline on Thursday.
Shares of insurers such as Aetna and UnitedHealth were mixed during the day as investors digested better-than-expected quarterly earnings for WellPoint.
Healthcare reform aside, companies face potential payment reductions from the government's massive Medicare and Medicaid health insurance programs, especially as greater emphasis is placed on the economy and national deficit.
"Maybe healthcare falters, but ... there's still a regulatory cycle going on. CMS (Centers for Medicare and Medicaid Services) still has a lot of leeway," Concept Capital's Washington Research Group healthcare analyst John Shepard said.
Consumer advocacy groups, unions and other supporters of health care reform are pressuring lawmakers to keep the legislation alive despite the Republican victory that took away Democrats' 60-vote supermajority in the Senate.
Analysts have said that hospital owners like Tenet Healthcare and drugmakers like Pfizer and Merck & Co stand to gain the most from millions more insured patients and have the most to lose if health care reform dies.
Representatives for various groups, including American Hospital Association and America's Health Insurance Plans (AHIP), declined to say specifically what they expected from Obama's speech or where reform efforts might be headed.
AHIP spokesman Robert Zirkelbach said his group had not endorsed one approach over another. "We're waiting to see what policymakers ultimately decide," he said.