The Dow Jones Industrial Average is hitting the skids, weighed down largely by UnitedHealth Group since one of its top executives was killed.
The Dow fell 267 points Tuesday, closing 0.6% decrease after 9 straight days of declines — its longest shedding streak since 1978. The downturn has coincided with a steep drop within the shares of UnitedHealthcare’s guardian firm since CEO Brian Thompson was shot and killed in New York City on Dec. 4. UnitedHealth Group’s inventory has tumbled almost 20% since then, whereas the index itself has slipped 3.4% over the interval.
The inventory costs of America’s largest medical health insurance suppliers — together with Aetna proprietor CVS Health, Cigna and Humana — have additionally tumbled not too long ago. As of Tuesday’s closing bell, the Dow had fallen 1,564 factors since Dec. 4, with UnitedHealth Group accounting for 804 of these factors.
UnitedHealth Group can be the worst performer within the 30-stock index this month, with losses greater than double these of the second-worst performer, Goldman Sachs. Other main companies whose shares commerce on the Dow, akin to Nvidia, Sherwin-Williams and Travelers, have additionally contributed to the index’s slide.
By comparability, the S&P 500 is hovering round break-even for the month, and the Nasdaq Composite has soared by greater than 4.5% in December. Both are close to all-time highs.
Because the Dow is a price-per-share-weighted common, whereas the S&P and Nasdaq are weighted by market worth, UnitedHealth Group’s fall has had a better affect on it — the place it’s the one well being insurer. The inventory, at $485 per share, is the second-priciest on the index, however when it comes to market worth it’s solely the Seventeenth-largest inventory within the S&P 500.
UnitedHealth Group has misplaced greater than $110 billion in market worth for the reason that assault on Thompson. Its friends have additionally skilled steep losses. CVS has plummeted greater than 25%, wiping out greater than $19 billion in worth; Cigna has dropped 20%, erasing almost $20 billion; and Humana has fallen 19%, shedding nearly $7 billion.
The largest exchange-traded fund that tracks the general well being care sector, together with shares of non-insurers, has fallen greater than 5% since Dec. 4. Once once more, CVS, UnitedHealth Group, Cigna and Humana all rank because the worst performers, with double-digit losses of 18% to 25%. Other well being shares within the Dow are comparatively holding up, with shares of drugmakers Johnson & Johnson and Amgen every falling greater than 5% and Merck falling 1.5% this month.
The downturns largely mirror traders’ reactions to public outrage on the well being care system within the wake of the killing, which some trade executives have sought to handle.
In a New York Times opinion article final week, UnitedHealth Group CEO Andrew Witty denounced “the vitriol that has been directed at our colleagues who’ve been barraged by threats” however acknowledged that “the well being system doesn’t work in addition to it ought to, and we perceive folks’s frustrations with it.”
He added that “nobody would design a system just like the one we’ve got,” calling it “a patchwork constructed over many years” and saying the insurance coverage big is mission-driven to “assist make it work higher.”
Since the early Eighties, medical care prices have risen faster than overall inflation, whereas well being insurers have grown ever bigger. UnitedHealth Group reported income exceeding $371 billion final 12 months alone, far forward of its rivals. Fellow insurers Cigna reported $195 billion, and Humana had income of $106 billion final 12 months.
Meanwhile, President-elect Donald Trump is vowing to “knock out” pharmacy profit managers, the third events that run drug packages on behalf of main insurers. Those companies have drawn widespread criticism partially as a result of most of the largest insurance coverage suppliers, together with UnitedHealth Group, Cigna and CVS, additionally personal a number of the largest such corporations.
Trump instructed reporters Monday that he desires to get prices “down at ranges that no person has ever seen earlier than,” with out offering particulars. “I don’t know who these middlemen are, however they’re wealthy,” he mentioned.
