Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



UnitedHealth and Microsoft Overcome the Dow's Dive

The market has swooned today as the Dow Jones Industrial Average (DJINDICES: ^DJI  ) , coming off yesterday's new record high, has dipped into the red. As of 2:20 p.m. EDT, the Dow has dropped 80 points, with all but a handful of Dow stocks taking a hit on the day. Earnings season races on, and UnitedHealth Group (NYSE: UNH  ) has stood out as a winner, riding earnings optimism to the top of the Dow. Fellow Dow riser Microsoft (NASDAQ: MSFT  ) has put in a good day of its own following the latest cost-cutting reports. Let's catch up on what you need to know.

UnitedHealth hits the mark
UnitedHealth hit the gas in the second quarter: The market's biggest insurer grew revenue by 7%. The company's earnings fell by 2% year over year in Q2, but UnitedHealth topped analyst expectations and has pushed its stock higher by 2.5% so far. Optimism around Obamacare's future convinced the company's leadership to boost the bottom end of its full-year profit guidance and raise its 2014 revenue outlook slightly. Even better for long-term investors, UnitedHealth pushed its dividend higher by 30%.

The expansion of Medicaid has been a huge growth-driver for top insurers in 2014, and UnitedHealth rallied again around that trend in the second quarter. The company's Medicaid enrollment climbed by almost 19%, with 380,000 new members signing up for plans. That strong result has UnitedHealth vowing to expand in 2015 to more government-run exchanges in the new Obamacare landscape, with the company looking to participate in up to two dozen states. Rising medical costs were to be expected with the growth in membership, as medical expenses jumped by 6%, but regardless, UnitedHealth turned in a stellar second quarter.

Source: Microsoft.

Microsoft's stock has also helped the Dow stave off even worse losses today after the tech giant announced it will slash as many as 18,000 jobs -- or around 14% of its employees -- over the course of the next year. CEO Satya Nadella is looking to slim Microsoft down as it absorbs assets it acquired from Nokia, with the cuts likely to shave personnel in areas overlapping with Nokia's device unit.

Wall Street has reacted well to the news, with Microsoft's stock jumping 1.5% this afternoon. Many analysts have urged the company to streamline its structure and save costs, particularly as Microsoft looks to dive into higher growth and highly competitive segments such as mobile. Overall, Nadella projects that the company will take up to $1.6 billion in charges through the coming year as Microsoft absorbs Nokia's units and builds up its mobile portfolio. The cuts were virtually inevitable, however, as the company announced at the time of the Nokia purchase that it aimed to slash $600 million in costs in the 18 months following the major acquisition. So far, it looks like Microsoft is on track.

Leaked: The tech world's shocking new smart device you can't ignore
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

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

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: 3033324, ~/Articles/ArticleHandler.aspx, 8/31/2015 3:56:10 PM

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 Carroll

Dan began writing for the Motley Fool in 2012. He is a health care specialist who also follows the defense industry along with tracking the broader U.S. and international markets.

Today's Market

updated Moments ago Sponsored by:
DOW 16,541.56 -101.45 -0.61%
S&P 500 1,976.58 -12.29 -0.62%
NASD 4,777.90 -50.43 -1.04%

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

8/31/2015 3:41 PM
^DJI $16547.94 Down -95.07 -0.57%
MSFT $43.43 Down -0.50 -1.14%
Microsoft CAPS Rating: ***
UNH $115.78 Down -1.50 -1.28%
UnitedHealth Group CAPS Rating: *****
AAPL $112.92 Down -0.38 -0.33%
Apple CAPS Rating: ****