MW This beaten-down sector could offer you a ripe investment opportunity
By Philip van Doorn
Also in Weekend Reads: Reaction to Trump's decision to nominate Kevin Warsh to lead the Fed, the software wipeout, momentum stocks and what to stream in February
The healthcare sector was the second-worst performer among the 11 sectors of the S&P 500 for 2026 through Jan. 29.
The first month of 2026 has flown by. The S&P 500 has returned 1.9% this year through Thursday, with dividends reinvested. Here's a breakdown of how the 11 sectors of the large-cap U.S. benchmark index have performed on the same basis:
The 20% decline in shares of UnitedHealth Group on Jan. 27 factored heavily into the healthcare sector's underperformance.
The healthcare sector has been the second-worst performer in part because shares of UnitedHealth Group $(UNH)$ fell 20% on Tuesday, after the company said it expected its revenue to decline, and because the Centers for Medicare & Medicaid Services proposed an increase in reimbursement rates of only 0.09% for 2027. Steve Goldstein and Jaimy Lee explained how CMS estimates tend to change before they are finalized.
It turns out that two-thirds of analysts working for brokerage and research firms polled by LSEG who cover UnitedHealth Group rate the stock a buy or the equivalent. One of the believers is Oppenheimer analyst Michael Wiederhorn, whose rating on UNH is outperform. In a note to clients on Tuesday he increased his earnings-per-share estimates for the company, although he lowered his price target for the stock to $385 from $415, "to reflect the regulatory environment." That $385 price target was 32% higher than UNH's closing price of $292.29 on Thursday.
It turns out that, among the largest 10 companies in the S&P 500 SPX healthcare sector by market capitalization, there are majority buy or equivalent ratings on nine of them, and UNH is tied with Abbott Laboratories $(ABT)$ for the highest upside potential implied by the consensus price targets:
Company Share "buy" ratings Jan. 29 price Consensus price target Implied 12-month upside potential Market cap ($bil) Eli Lilly and Co. 73% $1,024.14 $1,137.93 11% $968 Johnson & Johnson 57% $227.29 $228.99 1% $548 AbbVie Inc. 65% $220.43 $247.58 12% $390 Merck & Co Inc. 60% $108.34 $116.28 7% $269 UnitedHealth Group Inc. 67% $292.29 $374.16 28% $265 Thermo Fisher Scientific Inc. 83% $592.16 $663.21 12% $222 Amgen Inc. 49% $342.94 $334.50 -2% $185 Abbott Laboratories 71% $106.09 $135.93 28% $184 Intuitive Surgical Inc. 67% $507.55 $613.26 21% $180 Gilead Sciences Inc. 81% $139.55 $137.23 -2% $173 Source: LSEG
If you believe that the healthcare sector might be better as a broad investment, you can use an exchange-traded fund to track it. One example is the State Street Health Care Select Sector SPDR ETF XLV, which is weighted by market cap, with Eli Lilly $(LLY)$ making up 14.6% of the portfolio. An example of a sector fund that steers clear of cap weighting is the Invesco S&P 500 Equal Weight Health Care ETF RSPH.
Click on the ticker symbols for more about each company, fund or index.
Read: Tomi Kilgore's guide to the wealth of information available for free on the MarketWatch quote page
More healthcare coverage:
-- Medicare is about to start negotiating the prices of these 15 drugs
-- More Americans are choosing Obamacare plans they can't afford in first look at ACA without enhanced tax credits
-- Opinion: Getting a doctor's appointment will become even harder as a perfect storm hits the U.S. healthcare system
Trump makes his Fed selection
A reaction against government policy uncertainty might help explain why the price for continuous front-month contracts for gold (GC00) on the New York Mercantile Exchange rose 88% for one year through Thursday to settle at $5,354.80 an ounce. But gold was down more than 6% in midday trading on Friday, possibly in reaction to President Donald Trump's decision to nominate Kevin Warsh to succeed Jerome Powell as chair of the Board of Governors of the Federal Reserve System when Powell's term ends in May. Powell's term as a member of the Fed's Board of Governors ends in January 2028.
Warsh is a former member of the Federal Reserve board. Victor Reklaitis and Greg Robb looked further into the nominee's background and explained how Warsh went from being a Fed insider to a critic of the central bank's inflation policy.
Here is a link to MarketWatch's live coverage of this developing story.
More on Warsh and the Fed:
-- Bond market isn't getting everything it wants from Trump's choice of Warsh for Fed chair
-- Here's how Warsh's Senate confirmation is likely to go as a key Republican threatens to block it
-- Gold's searing run halted, silver briefly drops below $100 as Warsh to Fed hits dollar debasement trade
More on metals and markets:
-- Stocks, gold and copper see big swings that show investors have few places to hide
-- Silver is having a meme-stock moment. Just look at these three charts.
-- Opinion: Gold's rise above $5,000 shows why it should be in every investor's portfolio
Momentum picks
Momentum strategies have proved to be a viable means for investors to beat stock-market indexes by riding along with stocks that have gone up recently.
The idea of a momentum strategy is to ride along with groups of stocks that have been performing well lately. A periodic shift to names showing recent momentum can work out well over the long term.
This week Michael Brush shared momentum-stock picks from Travis Prentice, a money manager at the Informed Momentum Co.
For investors who prefer index funds, an analysis in November of nine approaches taken by Invesco to tracking subsets of the S&P 500 showed that the momentum approach had worked best over multiple periods.
How your bias can get you into trouble as an investor
Mark Hulbert looked into how assumptions about growth and value stocks can cause investors to lose money.
More from Hulbert: This chart tracks the 'single greatest predictor' of stock-market returns - it is never done this before
Can this man afford to retire at age 50?
Quentin Fottrell is the Moneyist.
Quentin Fottrell - the Moneyist - answered questions from a 50-year-old man who has managed his finances well but now expects to lose his job. Can he afford to retire, with $2 million saved, when he doesn't own a home?
More from the Moneyist:
-- 'I'm not looking to hire an attorney': My untrustworthy brother is executor of our family estate. What should I do?
-- 'I feel like this does us a disservice': My brother wants his $1 million inheritance in advance. Should he pay interest?
-- 'It's an expensive piece of equipment': My neighbor asked to borrow my snowblower. Do I say yes?
Software selloff and other news about companies
The S&P 500 software group was down 10.7% for 2026 through Thursday, with dividends reinvested, according to LSEG. Emily Bary explained how this reflected changing sentiment among investors and where the money was going.
More coverage from the MarketWatch companies and technology teams:
-- Lockheed Martin's stock is having its best month in half a century. Thanks, President Trump.
-- Microsoft's stock may be 'dead money' even after historic $357 billion market-cap wipeout
-- As SpaceX prepares for its IPO, Elon Musk's empire could get even more intertwined
-- Why Southwest Airlines' stock soared to its highest close in years
-- Here's how Amazon is looking to take on Walmart at its own game
-- How Nvidia's stock can get back to its winning ways after an underwhelming stretch
Tax time
Regardless of how you prepare your taxes, you may be well-serviced by reading the "What's New" section of the Internal Revenue Service's 1040 instructions every year.
Tax season brings changes every year. For example, the One Big Beautiful Bill Act that President Trump signed into law in July may increase your IRS refund. And if you are running a business, various changes brought about under the act will increase your available tax deductions for 2025, possibly drastically.
If you are eager to receive a refund, it is best to file your tax return as soon as possible. Beth Pinsker provided four tips to help you file your return quickly.
More tax tips:
-- Should you pay someone to do your taxes? Answer these three questions first.
-- I'm 65 and inherited an IRA. Can I give it away without paying taxes on it?
-- How do I open a 'Trump account'? The IRS has one simple solution for you.
A mortgage-industry lawsuit's lesson for all home buyers
MW This beaten-down sector could offer you a ripe investment opportunity
By Philip van Doorn
Also in Weekend Reads: Reaction to Trump's decision to nominate Kevin Warsh to lead the Fed, the software wipeout, momentum stocks and what to stream in February
The healthcare sector was the second-worst performer among the 11 sectors of the S&P 500 for 2026 through Jan. 29.
The first month of 2026 has flown by. The S&P 500 has returned 1.9% this year through Thursday, with dividends reinvested. Here's a breakdown of how the 11 sectors of the large-cap U.S. benchmark index have performed on the same basis:
The 20% decline in shares of UnitedHealth Group on Jan. 27 factored heavily into the healthcare sector's underperformance.
The healthcare sector has been the second-worst performer in part because shares of UnitedHealth Group (UNH) fell 20% on Tuesday, after the company said it expected its revenue to decline, and because the Centers for Medicare & Medicaid Services proposed an increase in reimbursement rates of only 0.09% for 2027. Steve Goldstein and Jaimy Lee explained how CMS estimates tend to change before they are finalized.
It turns out that two-thirds of analysts working for brokerage and research firms polled by LSEG who cover UnitedHealth Group rate the stock a buy or the equivalent. One of the believers is Oppenheimer analyst Michael Wiederhorn, whose rating on UNH is outperform. In a note to clients on Tuesday he increased his earnings-per-share estimates for the company, although he lowered his price target for the stock to $385 from $415, "to reflect the regulatory environment." That $385 price target was 32% higher than UNH's closing price of $292.29 on Thursday.
It turns out that, among the largest 10 companies in the S&P 500 SPX healthcare sector by market capitalization, there are majority buy or equivalent ratings on nine of them, and UNH is tied with Abbott Laboratories (ABT) for the highest upside potential implied by the consensus price targets:
Company Share "buy" ratings Jan. 29 price Consensus price target Implied 12-month upside potential Market cap ($bil)
Eli Lilly and Co. 73% $1,024.14 $1,137.93 11% $968
Johnson & Johnson 57% $227.29 $228.99 1% $548
AbbVie Inc. 65% $220.43 $247.58 12% $390
Merck & Co Inc. 60% $108.34 $116.28 7% $269
UnitedHealth Group Inc. 67% $292.29 $374.16 28% $265
Thermo Fisher Scientific Inc. 83% $592.16 $663.21 12% $222
Amgen Inc. 49% $342.94 $334.50 -2% $185
Abbott Laboratories 71% $106.09 $135.93 28% $184
Intuitive Surgical Inc. 67% $507.55 $613.26 21% $180
Gilead Sciences Inc. 81% $139.55 $137.23 -2% $173
Source: LSEG
If you believe that the healthcare sector might be better as a broad investment, you can use an exchange-traded fund to track it. One example is the State Street Health Care Select Sector SPDR ETF XLV, which is weighted by market cap, with Eli Lilly (LLY) making up 14.6% of the portfolio. An example of a sector fund that steers clear of cap weighting is the Invesco S&P 500 Equal Weight Health Care ETF RSPH.
Click on the ticker symbols for more about each company, fund or index.
Read: Tomi Kilgore's guide to the wealth of information available for free on the MarketWatch quote page
More healthcare coverage:
-- Medicare is about to start negotiating the prices of these 15 drugs
-- More Americans are choosing Obamacare plans they can't afford in first look at ACA without enhanced tax credits
-- Opinion: Getting a doctor's appointment will become even harder as a perfect storm hits the U.S. healthcare system
Trump makes his Fed selection
A reaction against government policy uncertainty might help explain why the price for continuous front-month contracts for gold (GC00) on the New York Mercantile Exchange rose 88% for one year through Thursday to settle at $5,354.80 an ounce. But gold was down more than 6% in midday trading on Friday, possibly in reaction to President Donald Trump's decision to nominate Kevin Warsh to succeed Jerome Powell as chair of the Board of Governors of the Federal Reserve System when Powell's term ends in May. Powell's term as a member of the Fed's Board of Governors ends in January 2028.
Warsh is a former member of the Federal Reserve board. Victor Reklaitis and Greg Robb looked further into the nominee's background and explained how Warsh went from being a Fed insider to a critic of the central bank's inflation policy.
Here is a link to MarketWatch's live coverage of this developing story.
More on Warsh and the Fed:
-- Bond market isn't getting everything it wants from Trump's choice of Warsh for Fed chair
-- Here's how Warsh's Senate confirmation is likely to go as a key Republican threatens to block it
-- Gold's searing run halted, silver briefly drops below $100 as Warsh to Fed hits dollar debasement trade
More on metals and markets:
-- Stocks, gold and copper see big swings that show investors have few places to hide
-- Silver is having a meme-stock moment. Just look at these three charts.
-- Opinion: Gold's rise above $5,000 shows why it should be in every investor's portfolio
Momentum picks
Momentum strategies have proved to be a viable means for investors to beat stock-market indexes by riding along with stocks that have gone up recently.
The idea of a momentum strategy is to ride along with groups of stocks that have been performing well lately. A periodic shift to names showing recent momentum can work out well over the long term.
This week Michael Brush shared momentum-stock picks from Travis Prentice, a money manager at the Informed Momentum Co.
For investors who prefer index funds, an analysis in November of nine approaches taken by Invesco to tracking subsets of the S&P 500 showed that the momentum approach had worked best over multiple periods.
How your bias can get you into trouble as an investor
Mark Hulbert looked into how assumptions about growth and value stocks can cause investors to lose money.
More from Hulbert: This chart tracks the 'single greatest predictor' of stock-market returns - it is never done this before
Can this man afford to retire at age 50?
Quentin Fottrell is the Moneyist.
Quentin Fottrell - the Moneyist - answered questions from a 50-year-old man who has managed his finances well but now expects to lose his job. Can he afford to retire, with $2 million saved, when he doesn't own a home?
More from the Moneyist:
-- 'I'm not looking to hire an attorney': My untrustworthy brother is executor of our family estate. What should I do?
-- 'I feel like this does us a disservice': My brother wants his $1 million inheritance in advance. Should he pay interest?
-- 'It's an expensive piece of equipment': My neighbor asked to borrow my snowblower. Do I say yes?
Software selloff and other news about companies
The S&P 500 software group was down 10.7% for 2026 through Thursday, with dividends reinvested, according to LSEG. Emily Bary explained how this reflected changing sentiment among investors and where the money was going.
More coverage from the MarketWatch companies and technology teams:
-- Lockheed Martin's stock is having its best month in half a century. Thanks, President Trump.
-- Microsoft's stock may be 'dead money' even after historic $357 billion market-cap wipeout
-- As SpaceX prepares for its IPO, Elon Musk's empire could get even more intertwined
-- Why Southwest Airlines' stock soared to its highest close in years
-- Here's how Amazon is looking to take on Walmart at its own game
-- How Nvidia's stock can get back to its winning ways after an underwhelming stretch
Tax time
Regardless of how you prepare your taxes, you may be well-serviced by reading the "What's New" section of the Internal Revenue Service's 1040 instructions every year.
Tax season brings changes every year. For example, the One Big Beautiful Bill Act that President Trump signed into law in July may increase your IRS refund. And if you are running a business, various changes brought about under the act will increase your available tax deductions for 2025, possibly drastically.
If you are eager to receive a refund, it is best to file your tax return as soon as possible. Beth Pinsker provided four tips to help you file your return quickly.
More tax tips:
-- Should you pay someone to do your taxes? Answer these three questions first.
-- I'm 65 and inherited an IRA. Can I give it away without paying taxes on it?
-- How do I open a 'Trump account'? The IRS has one simple solution for you.
A mortgage-industry lawsuit's lesson for all home buyers
(MORE TO FOLLOW) Dow Jones Newswires
January 30, 2026 13:03 ET (18:03 GMT)
MW This beaten-down sector could offer you a ripe -2-
Three people who bought homes and took out mortgage loans through subsidiaries of Rocket Cos. $(RKT)$ have sued the company, saying it compelled real-estate agents to direct home buyers to Rocket, while steering clear of other lenders that might offered better loan terms to the buyers.
Aarthi Swaminathan explained how the lawsuit included an important lesson for anyone buying a home.
Don't Short Yourself
Don't Short Yourself is MarketWatch's new weekly newsletter, offering smart tips to help you earn, stack and grow your money.
MarketWatch's newest newsletter is Don't Short Yourself. You can sign up here to have each new edition waiting in your inbox. Even if you have a high level of expertise about how to manage money, chances are that someone you know can benefit from the weekly tips.
This week Charles Passy explained how you may be leaving money on the table that is there for you, with no risk.
From MarketWatch Editor in Chief Mark DeCambre: The best money advice that I ever got was boring - and life-changing
What to stream in February
Mike Murphy writes the What's Worth Streaming column, which includes a look each month at what will be offered by streaming services and what will be going away. These detailed rundowns include tiered pricing schedules for each of eight streaming services.
Here's Mike's coverage of What to Stream in February.
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-Philip van Doorn
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
January 30, 2026 13:03 ET (18:03 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
