Politics Weigh on the Dow -- Again
The markets are back to stressing about the fiscal cliff today, and the Dow Jones Industrial Average is back in the red. As of 2:15 p.m. EST, the Dow is down 90 points, or 0.68%. Nearly the entire index has fallen, with a mere three stocks reporting gains. From one big loser dragging the index down to a familiar sector back in the red, it's a bearish day out on Wall Street today.
Politics and partisan posturing
Politics dragged on the Dow after the index had meandered lower through the morning session. House Speaker John Boehner's remarks that spending continues to be an impasse in fiscal-cliff negotiations heightened worries. Boehner says that without further spending concessions from the White House, the U.S. will head off the fiscal cliff to start next year.
That's not good for stocks and businesses, and the sell-off following the Speaker's remarks reflected that. Stocks that could be heavily hit by the fiscal cliff's passing, such as UnitedHealth Group and DuPont , led the day lower. These two stocks have seen losses of 1.2% and 1.15%, respectively. UnitedHealth faces the potential reduction of Medicare outlays, while DuPont has already declared that it intends to curtail spending next year in light of the oncoming fiscal cliff.
Today's biggest loser is pharmaceutical giant Merck , down 1.5%. Merck CEO Kenneth Frazier told the Financial Times yesterday that while his company will be able to handle new costs from the coming health care reforms, any cap on drug prices as part of the fiscal cliff's solution could threaten the industry's ability to find new treatments.
The Dow's two energy giants are also down on the day: Exxon-Mobil and Chevron have fallen 1.1% and 0.3%, respectively. With little news out on the day for these two, it's likely they and much the energy sector are falling today based on fiscal-cliff fears. Falling off the cliff would likely push many other businesses to follow the aforementioned DuPont's example in slashing spending -- including energy spending. Any widespread trend could weigh heavily on the energy sector's sales in the early part of next year.
There are precious few stocks up on the Dow, but retailer Wal-Mart is up 0.5% despite the Indian government's recently announced investigation into the company's lobbying practices. Caterpillar and Travelers have also eked out minor gains on the day so far.
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The article Politics Weigh on the Dow -- Again originally appeared on Fool.com.
Dan Carroll has no positions in the stocks mentioned above. The Motley Fool owns shares of ExxonMobil. Motley Fool newsletter services recommend Chevron and UnitedHealth Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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