Why the Dow is being dragged down by a Swiss company’s bad news

Investors returning from the Labor Day break could be forgiven for wondering if their eyes were deceiving them — but yes, Dow Jones Industrial Average futures were significantly worse than the S&P 500.

The Dow contract YM00 was down 366 points, or 0.7%, compared with a more modest 0.2% retreat for the S&P 500 ES00.

The gap is explained by the price-weighted nature of the Dow DJIA and one company in particular: Amgen.

Amgen shares AMGN fell sharply, down some $25, or 6%, in premarket action. That comes out to 158 points in the Dow by itself, as Amgen has the fourth-highest stock price in the index. The biopharmaceutical company, by contrast, is the 49th largest S&P 500 stock, so a one-day fluctuation is barely perceptible.

The Amgen decline was due to a rival company's setback. Novartis NVS said on Friday night that a late-stage trial of pelacarsen, its experimental cardiovascular drug, did not meet its primary endpoint.

Analysts at Citi called the news "surprising" and said it's bad for other companies trying to tackle what's called lipoprotein(a). Lp(a) is a type of cholesterol that increases the risk of heart disease and stroke and isn't helped by statin drugs. A smaller company, NewAmsterdam Pharma NAMS, dropped about 10% in premarket trading on Tuesday.

As for Novartis CH:NOVN, its stock fell 3% on Monday in Swiss trade, then tumbled another 10% on Tuesday after revealing even more bad news. It said that a late-stage trial of del-desiran for people living with a muscular disease called myotonic dystrophy type 1 also didn't meet its primary endpoint.

Dyne Therapeutics DYN, which has a drug in development also aiming to treat that disease, lost a quarter of its value in premarket trade.