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• The Dow Jones fell 1.6% to 43,4500 on Friday.
• US PMIs came in mixed, consumer sentiment fell, inflation expectations accelerated.
• UnitedHealth is reported to be under investigation by the US Justice Department.

The Dow Jones Industrial Average (DJIA) backslid over 700 points on Friday, knocking lower around one and a half percent and touching the 43,500 level for the first time in over a month. US economic data broadly came in mixed to bearish, but key losses are piling onto single-target stocks, dragging the Dow Jones significantly lower.

Possible recession fears are back on the table after a sharp turnaround in US Purchasing Managers Index (PMI) figures. The Services PMI component fell to 49.7, its lowest print in exactly two years. With the Services PMI falling below the 50.0 mark and back into contraction territory, the Manufacturing PMI component’s own sluggish uptick helped keep things on balance, but not by much. The Manufacturing PMI rose to 51.6 from 51.2, reaching a seven-month high.

The University of Michigan’s (UoM) Consumer Sentiment Index also fell sharply in January, hitting a 15-month low of 64.7, as inflation concerns weighed on consumer sentiment. The UoM 12-month Consumer Inflation Expectations shows that a sample of US consumers now expect inflation to be 4.3% over the next year, and the 5-year outlook also accelerated to 3.5%. With consumer inflation expectations rising, it will be harder for the Federal Reserve (Fed) to deliver rate cuts.

Dow Jones news
 

Roughly half of the Dow Jones equity board is in the green on Friday, but steep declines in UnitedHealth (UNH) are pummeling the Dow’s headline bids. UnitedHealth is down 9% on the day, falling to $458 per share after it was revealed the healthcare giant is set to be investigated by the US Justice Department. 

Dow Jones price forecast
 

With one hard bearish push, the Dow Jones is now trading into the dead zone between the 50-day and 200-day Exponential Moving Averages (EMA) at 43,945 and 41,970, respectively. Price action has turned sharply bearish, but there is still plenty of room for a sharp pullback into the high side. 

A hard ceiling has been priced in near the 45,00 handle, and bidders will likely begin to pile back into the chart as prices continue to decline toward 43,000.

Dow Jones daily chart
 

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