Dow Stock Suddenly Plunges After DOJ Says It Lied About Cancer Threat

July 12, 2019 12:36 UTC

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.

Johnson & Johnson Stock Dives 5%

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.

Johnson & Johnson stock suffered a precipitous decline on Friday. | Source: Yahoo Finance

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.

Dow Clings to Record Rally Despite J&J Slide

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.

@Y3llowb1ackbird

Josiah is the US Editor at CCN, where he focuses on financial markets. He has written over 2,000 articles since joining CCN in 2014. His work has also been featured on ZeroHedge, Yahoo Finance, and Investing.com. He lives in rural Virginia. Follow him on Twitter @y3llowb1ackbird or email him directly at josiah.wilmoth(at)ccn.com.