Stock Market Today: Dow Sinks 396 Points as UnitedHealth Spirals

UnitedHealthcare sign outside of headquarters in Minnesota — (Image credit: Mike Bradley/Bloomberg via Getty Images)

Stocks sold off sharply in Tuesday's risk-off session. Signs of a resilient labor market created headwinds early on, while weakness in several Magnificent 7 stocks sparked more selling pressure.

One bright spot early on was General Electric, now called GE Aerospace (GE), which completed its highly anticipated spinoff of GE Vernova (GEV), though enthusiasm faded amid broad-market headwinds.

On the economic front, the Job Openings and Labor Turnover Survey (JOLTS) kicked off a busy week of jobs data. A mid-morning release from the Bureau of Labor Statistics showed the number of job openings ticked slightly higher in February, to 8.8 million. Both hires and separations edged up too.

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"Although there is plenty of speculation that employment has slowed down, recent numbers, including job openings as well as initial jobless claims, continue to indicate that the U.S. labor market has remained stable," says Eugenio Alemán, chief economist at Raymond James.

The good-news-is-bad-news jobs data only makes the Fed's potential rate-cut timeline all the more murkier. Adding to the uncertainty are rising oil prices, which rose 1.7% Tuesday to $85.15 per barrel. Crude oil prices are now up nearly 19% for the year to date and this could keep inflation – and interest rates – higher for longer.

GE completes GE Vernova spinoff

In single-stock news, GE stock was up 3.3% at its intraday high on its first day trading as GE Aerospace. The former industrial giant spun off GE Vernova (GEV), which houses its gas power and renewable energy business. At the close, though, GE was down 2.4%, while GEV shares fell 1.4%.

Still, "GE's decision to split up helped change sentiment on the name. Its price performance is much more encouraging since it decided to split, with upside accelerating as the spinoffs came to fruition," writes Dan Burrows, senior investing writer at Kiplinger, about the GE spinoff. "GE's annualized total return easily tops the S&P 500 over the past five years, and doubles the broader market's returns for the trailing three-year period."

Tesla slides on Q1 deliveries miss

Tesla (TSLA) slid 4.9% after the electric vehicle maker said it delivered 386,810 vehicles in the first quarter. This was down 8.5% year-over-year and much less than the 457,000 vehicles analysts were expecting, according to FactSet.

In a press release, Tesla pointed to factory shutdowns as a result of the Red Sea conflict and an arson attack at the Gigafactory Berlin as reasons for the drop in deliveries.

Fellow Mag 7 stocks Nvidia (NVDA, -1.0%), Alphabet (GOOGL, -0.6%) and Microsoft (MSFT, -0.7%) took notable slides today.

UnitedHealth sinks on Medicare news

Elsewhere, several large-cap healthcare stocks tumbled after the Centers for Medicare and Medicaid Services said its reimbursement rate for Medicare Advantage health plans will increase by 3.7% next year. This is unchanged from the agency's January projection and lower than some were hoping for.

Humana (HUM, -13.4%), CVS Health (CVS, -7.2%) and UnitedHealth Group (UNH, -6.4%) all finished Tuesday with significant losses.

UNH's large drop – which cut $29 billion from its market cap – made it the worst Dow Jones stock. And at $458 a share, it has the biggest impact on the price-weighted Dow Jones Industrial Average. As a result, the 30-stock index fell 1.0% today to 39,170.

The broader S&P 500 shed 0.7% to 5,205, while the rate-sensitive Nasdaq Composite slumped 1.0% to 16,240 as the 10-year Treasury yield hit its highest level since November.

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With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.