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HomeMarketWhat's Ailing the Dow This Year? UnitedHealth, Chevron, J&J, Amgen.

What’s Ailing the Dow This Year? UnitedHealth, Chevron, J&J, Amgen.

The Dow Jones Industrial Average often lags the S&P 500 and Nasdaq Composite in bull markets and holds up better in rockier conditions.

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Michael Nagle/Bloomberg

If you’ve been watching the
Dow Jones Industrial Average,
you’ve largely missed the big rally in stocks this year.

The action Thursday was a case in point. The Dow industrials fell 39 points, or 0.1%, to 34,054, while the
S&P 500 index
gained 1.5% to 4,179 and the
Nasdaq Composite
was up 3.3%.

So far this year, the Dow Industrials have risen 2.7%, against an 8.9% gain in the S&P 500 and a 16.6% increase in the Nasdaq.

What’s ailing the Dow? Several influential stocks in the index are in the red this year, led by
Group (ticker: UNH), which is the worst percentage loser, with an 11.1% drop to $470.83.

That decline has had an outsize impact on the Dow because UnitedHealth, the country’s largest health insurer, has the index’s highest stock price and thus the biggest impact on the index.

Other losers in the Dow include
Johnson & Johnson
Procter & Gamble
(PG), and
(CVX)—which all are down about 6%, Bloomberg data show.

The Dow, which dates back to 1896 in its current 30-stock format, uses an old-style price weighting that could have been calculated on pen and paper in the days before computers. Each one-point change in a Dow component moves the index by 6.6 points.

The drop in UnitedHealth of 59 points so far this year has clipped 391 points from the index’s value, or more than 1%. Amgen,
J&J, P&G, and Chevron all have a material impact on the index because their stocks are priced above $100.

With a weighting tilted toward more conservative blue-chip stocks, the Dow often lags the S&P 500 and Nasdaq in bull markets and holds up better in rockier conditions. Last year, the Dow fell 6.8%, far better than the S&P 500’s 19% drop.

UnitedHealth is the top stock in the Dow, but it ranks just ninth in the S&P 500, while the Dow’s No. 2, Goldman Sachs Group (GS), is just 62nd in the S&P 500. The Dow’s many critics point to a quirky price structure that makes Goldman the second-most important stock to argue it’s less relevant to investors than it once was.

Six of the top 10 stocks ranked by market value aren’t even in the Dow:
Berkshire Hathaway
(TSLA), Nvidia (NVDA), and Exxon Mobil (XOM). Exxon was booted from the index near its low in 2020 in an ill-timed move in favor of Salesforce (CRM), whose stock is down sharply since then.

The least-influential stocks in the Dow,
(INTC), Walgreen Boots Alliance (WBA), Verizon Communications (VZ), and Cisco Systems (CSCO), are priced under $50 each and have little impact on it. Their low prices make them vulnerable to getting booted from the Dow when the next changes are made to the venerable index.

Write to Andrew Bary at


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