Wall Street Sees Red Amid UnitedHealth Investigation and Weak Economic Data
U.S. stocks tumbled on Friday, with all three major indices heading for weekly losses, as a government investigation into UnitedHealth (NYSE:UNH) and a slew of disappointing economic reports dampened investor sentiment.
The S&P 500 (SP500) fell 0.5%, the Nasdaq Composite (COMP:IND) slipped 0.6%, and the Dow Jones Industrial Average (DJI) dropped 0.8%. The declines extended Thursday’s 1% slide, bringing an end to a turbulent holiday-shortened week.
UnitedHealth Plunges on DOJ Investigation
UnitedHealth (UNH) led decliners on the Dow, plunging 9% after a report from The Wall Street Journal revealed that the U.S. Department of Justice (DOJ) has launched an investigation into the company’s Medicare billing practices. UnitedHealth declined to comment but later criticized the Journal’s reporting.
Gloomy Economic Updates Pressure Markets
A batch of disappointing economic data further rattled investors:
- February S&P Composite PMI fell to 51.6 from 52.7, while the services index dropped sharply to 49.7 from 53.0.
- University of Michigan’s Consumer Sentiment Index sank to 64.7, missing expectations of 68.0, as concerns over tariff-driven price hikes weighed on consumer confidence.
- January U.S. existing home sales slumped 4.9% to 4.08 million, missing estimates of 4.13 million.
“The upbeat mood seen among U.S. businesses at the start of the year has evaporated, replaced with a darkening picture of heightened uncertainty,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.
Market Reaction and Weekly Performance
For the week, the Dow (DJI) was down ~1.6%, while the S&P 500 (SP500), despite hitting two record closing highs, was on track for a weekly decline.
Meanwhile, bond yields edged lower, with the 10-year Treasury yield (US10Y) dropping 5 basis points to 4.46%, while the 2-year yield (US2Y) fell 3 basis points to 4.24%.
Adding to the market’s woes, Walmart’s (WMT) soft financial outlook earlier in the week also contributed to Thursday’s sell-off, further dampening investor confidence.
