Markets
The Dow Was Up 467 Points Before Lunch. J&J's 5.7% Drop Helped Erase It
The Dow peaked at 52,317 on October 13, up 467 points, and closed at 51,670, down 180. Johnson & Johnson fell 5.73% on weak medical-device sales and UnitedHealth gave back a 5% opening jump.
The Dow Jones Industrial Average started Tuesday as if earnings season would carry it higher. It opened at 52,092.99 and climbed to 52,317.32 in the morning, 466.77 points above Monday's close. It finished at 51,670.10, down 180.45 points, or 0.35%. The broader market was flatter: the S&P 500 eased 0.02% to 7,805.45, the Nasdaq Composite 0.15% to 27,204.38 and the Russell 2000 0.40%.
Healthcare did much of the damage. Johnson & Johnson fell 5.73% to $248.61 after its third-quarter report. Adjusted earnings of $2.59 a share beat the $2.53 consensus, but sales in its MedTech division rose only 2.5% to $8.64 billion, below the roughly $8.74 billion expected, the second quarterly miss in a row for that unit. Reported profit fell to $0.09 a share because of a one-time charge of about $5.5 billion linked to its proposed talc litigation settlement.
UnitedHealth had the opposite problem: a good report and a fading stock. The company earned $4.69 a share on an adjusted basis, on revenue of $112.7 billion, and raised its full-year outlook to at least $20.50 a share. The shares opened 5.05% higher at $397.63, then slid all day to close at $377.76, down 0.20%. Because the Dow is weighted by share price, moves in high-priced stocks such as UnitedHealth and Goldman Sachs, which also reversed an opening gain, count for more than the same percentage move in cheaper ones.
The Health Care Select Sector SPDR (XLV) fell 1.35% to $169.66, with Merck down 2.39%, AbbVie 2.40% and Eli Lilly 1.36%. That broke the run that had made healthcare, staples and utilities the market's leaders for two weeks. Utilities still rose 0.58%, while staples slipped 0.26%.
With the S&P 500 within 0.2% of its October 6 record and the Dow about 5% below its peak, the gap between the two indexes is a reminder of how much a handful of expensive stocks can steer the Dow on any given day.