This single, boring stock has a huge impact on the Dow Industrials — and therefore all markets
By all appearances, most eyes are on big banks’ earnings Friday and their ability to stir up volatility, but one unassuming stock could move prices a lot more. UnitedHealth has by far the biggest weighting in the Dow Jones Industrial Average . The 126-year-old blue-chip benchmark is price-weighted, meaning stocks with higher share prices are given the most weight. The health-care stock closed Wednesday at $520.97, while the stock with the second-highest impact on the 30-stock Dow, Goldman Sachs , stood at $327.37, nearly $200 less than UnitedHealth. Much of the attention is given to big lenders and technology companies during earning seasons, and health insurers are rarely seen as exciting stock plays. However, UnitedHealth, which reports earnings Friday before the bell, along with JPMorgan and Wells Fargo , has a massive impact on the market that can’t be ignored. In fact, UnitedHealth has contributed almost 319 points to the Dow’s April point gain of 410.64, responsible for almost 78% of the average’s entire move. The stock is on a tear this month, rallying more than 10%. The Dow, largely composed of blue-chip consumer discretionary and industrial names, is widely viewed as a proxy for wider economic conditions. It was first created in the 1890s to model a regular investor’s portfolio — a simple average of the prices of all constituents. While almost all other equity indexes are weighted by market capitalization, including the S & P 500 and the Nasdaq Composite , that doesn’t mean UnitedHealth’s power is diminished. The insurer is so large, with a $486 billion market cap, it ranks as the ninth-biggest company in the S & P 500. UNH YTD mountain UnitedHealth