With its gain of 3.2%, the Dow Jones Industrial Average (DJINDICES: ^DJI) outperformed most other major market indexes in August. Only a small handful of the Dow’s constituents, however, did the bulk of this heavy lifting.
Health insurer UnitedHealth Group (NYSE: UNH) led the way with its 24% advance, although the company itself didn’t do anything to merit it. Rather, give credit to Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), which announced a new 5-million-share stake in the struggling stock last month. Shares had fallen more than 60% from their April peak to early August’s multiyear low on a near-halving of its full-year profit guidance (largely due to unexpectedly high reimbursement costs). Warren Buffett and Berkshire’s lieutenants, however, clearly feel the sellers overshot their target. Investors interpreted Berkshire’s interest as a bullish clue.
Apple (NASDAQ: AAPL) finished a distant second to UnitedHealth, advancing nearly 12% last month. The company’s solid fiscal third-quarter results posted in late July helped the stock hit the ground running in August. But an announcement of an additional $100 billion investment (bringing the total up to $600 billion) in its American manufacturing capacity that immunizes its iPhone from import tariffs arguably accounts for most of Apple stock’s August gain.