The benchmark U.S. stock index is stuck in its longest losing streak since 1978, a potentially worrying sign for investors enjoying a generally quiet period for stocks.
However, Tuesday’s losses are primarily tied to a single company, UnitedHealth Group, and long-term returns remain healthy.
The Dow Jones Industrial Average fell 270 points, or 0.6%, marking its ninth consecutive session of losses, which began on December 5.
The nine-day losing streak is the Dow’s first since February 1978, according to FactSet, when the index was trading at about 750 points, less than 2% of more than 43,000 today.
The Dow has fallen 3.5%, or 1,560 points, during this negative period.
Shares of health insurer UnitedHealth Group were the worst performers among the 30 Dow components, falling $13, or 2.6%, to a six-month low.
Bank Goldman Sachs and artificial intelligence leader Nvidia were among the other stocks that fell at least 1% on Tuesday.
UnitedHealth’s prominent role in the losses was appropriate, as it is by far the Dow’s worst performer during the nine days of declines, with a loss of 21%.
This is almost double the drop of the next worst performer in the period, Nvidia, at 11%, while Goldman, home improvement firms Home Depot and Sherwin-Williams, and oil company Chevron have all fallen at least one 4% during this time.
UnitedHealth’s problems can be traced back to the idea that the policies of President-elect Donald Trump and Robert F. Kennedy Jr., Trump’s pick as secretary of Health and Human Services, will hurt the healthcare industry.
Read: UnitedHealth shares fall 5% after knowing details of Mangione’s manifesto
In addition, there is negative reaction related to the fatal shooting of UnitedHealth insurance subsidiary CEO Brian Thompson. According to CNBC, UnitedHealth stock accounted for about 40% of the Dow’s December decline through Monday.
The Dow has tracked the performance of 30 of the most prominent American public companies in different industries since 1928.
It remains one of the most cited measures of overall stock performance, although the Dow differs from most other indices in that it is calculated based on the stock price of its components, rather than the market capitalization of companies. underlying.
For example, Goldman and UnitedHealth are the two largest components of the Dow despite being, respectively, the 47th and 17th largest companies in the United States. This may distort results compared to market capitalization-weighted indices such as the S&P 500 and Nasdaq.
The Dow is still up more than 18% year-to-date, including dividend reinvestments, and is trading within 4% of its all-time high set just before the losing streak.
The index also remains up 3% since Election Day. And this month’s 2.7% loss is hardly a historical rarity, as the index has had 11 months worse than that in the last three years alone.
This article was originally published by Forbes US
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