Here’s Why the Dow Just Had Its Worst Slump in 40 Years | Global News Avenue

The Dow Jones Industrial Average edged higher midday on Wednesday after falling yesterday. ninth consecutive sessionending its longest one-day decline since 1978.

The blue-chip index fell 3.5% in its latest losing streak, while the S&P 500 fell just 0.6% and the Nasdaq Composite rose nearly 2%.

So why have the three major indexes, each containing stocks of some of America’s largest companies, diverged recently?

UnitedHealth Group shares fall after CEO killed, weighing on Dow Jones

UnitedHealth Group (united nations institutes of health) The company’s stock price fell more than 20% in the nine trading days following December 4, the day the company’s insurance unit CEO took over. shot to death The attack has put renewed focus on the business of health care in the United States. This was also the last day the Dow closed higher.

Since the shooting, lawmakers have introduced legislation to force the breakup of certain large health care companies, and President-elect Donald Trump has vowed to “eliminate the middle man,” referring to Pharmacy Benefit Manager (PBM), which negotiates drug prices on behalf of insurance companies, employers and government health plans.

CVS Health stock (CVS) and Cigna (CI), which like UnitedHealth operates as an insurance company and PBM, saw its shares fall 24% and 20%, respectively, from Dec. 4 to Tuesday’s close.

Before the plunge, UnitedHealth was trading at $610, making it the most expensive stock in the Dow and its most influential component. That’s because the Dow Jones Index is price weightingmeaning that the higher the company’s stock price, the greater its impact on the index. Meanwhile, the S&P 500 and Nasdaq capitalization weighting Give companies with greater market value greater influence.

Nvidia’s addition to the Dow also pulled the index lower

UnitedHealth isn’t the only company underperforming on the Dow this month. NVIDIA (NVDA) joined the blue-chip index in early November and has fallen on all but one trading day since December 4. antitrust investigation in China and The rise of rival Broadcom (AVGO), Enter technical adjustments earlier this week.

The Dow Jones appeared poised to end its losing streak on Wednesday. The index was up 0.4% at midday, led by gains from Nvidia and UnitedHealth, both up more than 3%.

If the Dow falls on Thursday, it would be its longest losing streak since September 1974, when the index fell for 11 consecutive days.