UnitedHealth Is a Big Drag on the Dow

The Dow wasn’t doing itself any favors on Wednesday.

With the Dow down about 330 points, or 0.9%, in recent trading, it was lagging behind both the S&P 500 and the Nasdaq. UnitedHealth Group, which was down 4.4%, contributed 154 points to the index’s decline. The next biggest negative contributor was Goldman Sachs, taking off only 27 points from the Dow.

The Dow is a price-weighted index, which means firms with large stock prices have more pull in the index. It’s a bit of an outdated way to measure the broader market.

This quirk actually helped the Dow outperform earlier this month when it marched to 40,000, but it’s mostly played to its detriment as megacap technology stocks have led the market higher in recent years. The Dow is also only 19% comprised of tech companies and doesn’t include highflying names like Nvidia or Super Micro Computer.

Investors can look to the S&P 500, which is 30% tech, if they want an index that gives pull to larger market caps, rather than stock prices.

While UnitedHealth made the Dow’s decline worse than it could have been, it was still a rough day for the broader market. All 11 S&P 500 sectors were on track to fall for the first time in May, according to Dow Jones Market Data.