Weekly Wrap-Up: Dow Jumps 1.5% on UnitedHealth, Microsoft Gains; Nike, McDonald's Lag

The Dow Jones Industrials (DJINDICES: ^DJI  ) had an interesting week, surviving geopolitical tension as well as some unexpected news from the Federal Reserve to climb higher. Despite a modest decline Friday, the Dow gained 237 points for the week, or roughly 1.5%, bringing the average to within 275 points of its all-time record close on Dec. 31 of last year. Helping to push the average up the most were UnitedHealth Group (NYSE: UNH  ) and Microsoft (NASDAQ: MSFT  ) , while Nike (NYSE: NKE  ) and McDonald's (NYSE: MCD  ) were the biggest drags on the Dow last week.

UnitedHealth's 7.5% gain for the week came as investors have gotten greater confidence about the impact of the Affordable Care Act on the health-insurance industry. A report from the Kaiser Family Foundation generally found that despite all the new policy options under Obamacare, the net impact on market share among existing health insurers was relatively small, allowing UnitedHealth to maintain its leadership role in the industry. With the company having several competitive advantages over its peers, including its international exposure through its Brazilian Amil unit as well as its Optum health-services business, UnitedHealth stands ready to take advantage of changing conditions in the industry.

Microsoft soared more than 6.5% after the company announced that it would release a version of its Office software for the iPad. Optimistic investors pointed to the potential to recoup billions in missed revenue opportunities from making Office available to iOS users on the popular tablet, but perhaps the more important message is that Microsoft is taking aim at mobile from a different angle, and that could help bolster the company's staying power even as PC sales continue to weaken.

On the other side of the coin, Nike's 4% drop largely came Friday, in the aftermath of the shoemaker's Thursday-night earnings report. Despite solid results, Nike's guidance for the future was less confident than shareholders wanted to see, with the company pointing to headwinds from a strong dollar and varying levels of economic growth in its foreign markets. Since joining the Dow last year, Nike has had one of the average's highest valuations of any component, and this week's drop shows just how important it is for the company to sustain growth at the pace investors expect in order to keep its high share price.

Finally, McDonald's fell 2%. The fast-food giant has continued to make moves seeking to bolster its flagging growth, including new menu items like its Petite Breakfast Pastries and the possibility of extending its breakfast hours beyond their current 10:30 a.m. limit. But with headwinds like the recent drop in the value of the Chinese yuan, McDonald's initiatives might well prove insufficient to prevent further same-store sales declines in the future. In an ultra-competitive industry, McDonald's has to assume its leadership role and come up with game-changing moves rather than simply following the crowd.

Find the winners you need
It's no secret that investors tend to be impatient with the market, but your best investment strategy is to buy shares in solid businesses and keep them for the long term. In the special free report "3 Stocks That Will Help You Retire Rich," The Motley Fool shares investment ideas and strategies that could help you build wealth for years to come. Click here to grab your free copy today.

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2886090, ~/Articles/ArticleHandler.aspx, 9/4/2015 4:09:26 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

Today's Market

updated 6 hours ago Sponsored by:
DOW 16,374.76 23.38 0.14%
S&P 500 1,951.13 2.27 0.12%
NASD 4,733.50 -16.48 -0.35%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/3/2015 4:35 PM
^DJI $16374.76 Up +23.38 +0.14%
MCD $96.01 Down -0.03 -0.03%
McDonald's CAPS Rating: ***
MSFT $43.50 Up +0.14 +0.32%
Microsoft CAPS Rating: ***
NKE $110.85 Up +0.15 +0.14%
Nike CAPS Rating: *****
UNH $113.99 Down -0.24 -0.21%
UnitedHealth Group CAPS Rating: *****