Merck & Co. taught investors today that one bad day for one stock can take down the entire Dow Jones industrial average.
Shares of the drug maker dropped after Merck said it is pulling its popular arthritis drug Vioxx off the market because extended trials showed it increases the risks of heart attacks and strokes.
Merck stock suffered its worst loss in at least 20 years, plunging around $12 a share to the $33 level, a loss of nearly 27 percent. That drop took 88 points off the Dow, which otherwise would have been up for the day. Merck's loss, however, more than offset all the gains among the other 29 Dow stocks, leaving the index off 56 points at 10,080.27.
The Standard & Poor's 500 stock index slipped a small fraction of a point to 1,114.58.
The Nasdaq Stock Market composite index climbed a little less than three points to 1,896.84.
Merck cast such a pall over the market that traders paid little attention to other negatives such as rising oil prices, flattening consumer spending and growing lines for unemployment benefits.
The jobs picture has been clouded by the spate of hurricanes in Florida and other southeastern states, which are being blamed for driving up the number of Americans filing new applications for jobless benefits. The unemployment claims count last week climbed by 18,000 to 369,000 -- it's fifth increase in the past six weeks.
Crude oil traded above $50 a barrel again today on the New York Mercantile Exchange, but once again slipped below that benchmark before trading ended, closing at $49.65, up 14 cents a barrel.
Hurricanes and high energy prices were blamed for weak consumer spending in August. Although consumer incomes grew by 0.4 percent, consumer spending did not increase at all, the Commerce Department reported.
For investors who track the market on a monthly or quarterly basis, today's trading didn't change the outcome of either the September of third quarter periods.
All three indexes were down for the quarter, the Dow fell 355 points, a 3.4 percent loss; the Nasdaq dropped 151 points, a 7.4 percent loss. The S&P slipped 26 points, a 2.2 percent loss.
For the month of September, the Dow was down 92 points, a loss of less than 1 percent, and the other two indexes were up. The Nasdaq gained 59 points or 3.2 percent. The S&P 500 closed up 10 points, a gain of about 1 percent.
If Wall Street folklore is to be believed, the September advance by the S&P forecasts the reelection of President Bush. Incumbents more often than not get returned to office when the markets makes gains the September before the presidential vote.