Markets

Dow Suffers Its Worst Day of 2018 on Health Sector Scare

Amazon, JPMorgan and Warren Buffett's Berkshire threaten to disrupt health care -- and disrupt the stocks market in the process on Tuesday.

A blockbuster announcement that Amazon.com (AMZN), JPMorgan Chase (JPM) and Warren Buffett's Berkshire Hathaway (BRK.B) would team up on a broad health-care initiative wreaked havoc on the sector and spilled over into the broader stock market. The Dow tumbled 1.4% on Tuesday, Jan. 30, to finish at 26,076. It was the industrial average's first one-day decline of 100 points or more in 2018.

What Happened in the Stock Market Today?

Amazon, Berkshire and JPMorgan collectively said in a press release Tuesday that "they are partnering on ways to address healthcare for their U.S. employees, with the aim of improving employee satisfaction and reducing costs." The surprise announcement included few details, but that didn't stop investors from fleeing out of fear that Amazon will do what it does when it enters a new market: Batter the competition. Dow components UnitedHealth Group (UNH) and Pfizer (PFE) fell 4.3% and 3.2%, respectively, to help lead the Health Care Select Sector SPDR ETF (XLV) 2.1% lower.

A piece of advice to investors in health care or any other sector: Keep your heads. The Dow has gained roughly 5% in a month -- and that's including Tuesday's losses. The occasional down day is a normal part of any bull market, especially when stocks have advanced this quickly and become this expensive. If you really want to start thinking about defense, consider a few funds that provide protection against a bear market. However, opportunists searching for dips to buy should look beyond today's broad one-day decline and focus on the high-yield dividend space, which is rife with bargains after getting beat up over the past couple of months.

Most Popular

Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
11 Best Monthly Dividend Stocks and Funds to Buy
Kiplinger's Investing Outlook

11 Best Monthly Dividend Stocks and Funds to Buy

Your bills come monthly. Why not your dividend checks? These are some of 2021's best monthly dividend stocks and funds for easier income planning.
May 25, 2021
4 Strategies to Reduce Taxes in Retirement
retirement planning

4 Strategies to Reduce Taxes in Retirement

Don’t let the possibility of higher taxes in the future sink your retirement income plan. Consider these four ways to help manage your taxes, keeping …
May 31, 2021

Recommended

Bonds: 10 Things You Need to Know
Investing for Income

Bonds: 10 Things You Need to Know

Bonds can be more complex than stocks, but it's not hard to become a knowledgeable fixed-income investor.
July 22, 2020
Is the Stock Market Closed on Memorial Day 2021?
Markets

Is the Stock Market Closed on Memorial Day 2021?

The stock market gets a full day off for Memorial Day. The bond market gets Monday off too, not to mention an early close ahead of the holiday weekend…
May 30, 2021
What Time Is the Stock Market Open Today?
Markets

What Time Is the Stock Market Open Today?

When does the stock market open? While the market does have regular hours, trading doesn't stop when the major exchanges close.
May 28, 2021
Bonds: Be Choosy for the Rest of 2021
Investing for Income

Bonds: Be Choosy for the Rest of 2021

Enough good things are happening in the economy and some fixed-income sectors (perhaps not T-bonds) to imply better second-half prospects.
May 26, 2021