One of the thirty stocks that make up the Dow Jones Industrial Average suddenly found itself under pressure on Friday after the Justice Department accused it of lying about cancer risks associated with one of its products.
Shares of Johnson & Johnson entered a freefall after Bloomberg reported that the Justice Department would open a criminal probe into the 133-year-old maker of numerous consumer staples ranging from Tylenol to baby products.
After opening above $140, the company’s stock slid as low as $132.32 before recovering to a present level of $133.67. That represents a session decline of 4.6%.
The Justice Department alleges that Johnson & Johnson lied when it claimed that its talcum powder does not put users at risk of cancer.
In addition to the Justice Department probe, the company faces thousands of lawsuits related to its controversial talcum powder products. Juries have already awarded plaintiffs hundreds of millions of dollars in related suits.
Johnson and Johnson is the 12th-largest component in the DJIA, boasting a 3.51% weighting in the index.
The stock’s woes threatened to bite into the Dow’s record-setting rally, but the index nevertheless consolidated gains of more than 140 points heading into the early afternoon. The Dow last stood at 27,228.4.
Last modified: June 23, 2020 2:45 PM UTC