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Which Dow stocks drove the comeback?

Updated: April 7, 2013 1:27PM



The Dow is a price-weighted average, which means that each $1 move in the price of a Dow stock has the same effect on the average. Companies with expensive stocks have more power to drive the average higher or lower.

A relatively small number of high-priced, strong-performing stocks have driven the Dow to its current level, such as IBM, McDonald’s, Home Depot and Wal-Mart Stores.

IBM has been the biggest driver of the Dow because its shares are priced far higher than the other 29 stocks within the average. IBM closed on Tuesday at $206.53, compared with $117.93 for Chevron, the Dow stock with the second-highest price.

In fact, IBM contributed 59 percent of the Dow’s overall gain since Oct. 9, 2007, when the market recorded its previous high, according to analyst Howard Silverblatt of S&P Dow Jones Indices. Because of its high price, IBM makes up roughly 11 percent of the overall weighting of the Dow. Chevron accounts for just over 6 percent.

Using the Dow’s price-weighted method of calculating the average, other top contributors have been McDonald’s (26 percent), Home Depot (25 percent) and Wal-Mart (19 percent).

The Dow’s price-weighted approach differs from that of many other stock indexes, including the Standard & Poor’s 500. That index of 500 stocks is market cap-weighted — the greater the overall value of a company’s outstanding shares on the market, the greater impact that stock has on the index’s movements.

Here are the Dow stocks and their percent contribution to the index’s growth since October 2007.

Dow stock % contribution Closing price Tuesday Price at Oct 9, 2007

IBM (IBM) 59% $206.53 $118.30

McDonald’s (MCD) 25.7% $95.81 $57.38

Home Depot (HD) 24.5% $70.47 $33.80

Wal-Mart Stores (WMT) 19.07% $73.72 $45.21

Travelers Cos. (TRV) 18.8% $81.46 $53.30

Chevron (CVX) 16.8% $117.93 $92.80

Walt Disney (DIS) 14.1% $56.48 $35.45

Johnson & Johnson (JNJ) 7.6% $77.66 $66.25

United Technologies (UTX) 6.6% $91.02 $81.20

Coca-Cola (KO) 6.5% $38.68 $28.94

3M Co. (MMM) 5.9% $104.45 $95.62

Caterpillar (CAT) 5.2% $90.21 $82.51

Procter & Gamble (PG) 4% $77.05 $71.08

United Health (UNH) 3.4% $53.50 $48.49

Pfizer (PFE) 1.7% $28.07 $25.54

Verizon Communications (VZ) 1.4% $47.69 $45.62

JPMorgan Chase (JPM) 1.3% $49.49 $47.57

American Express (AXP) 1.1% $64.12 $62.52

DuPont (DD) -0.5% $48.68 $49.48

Microsoft (MSFT) -1.2% $28.35 $30.10

Exxon Mobil (XOM) -2.1% $89.61 $92.67

Intel (INTC) -2.9% $21.51 $25.84

AT&T (T) -3.6% $36.60 $41.98

Merck & Co. (MRK) -6.9% $43.25 $53.63

Cisco Systems (CSCO) -7.9% $21.21 $33.08

General Electric (GE) -12.3% $23.59 $42.02

Boeing (BA) -15.3% $78.66 $101.45

Alcoa (AA) -21% $8.35 $39.72

Hewlett-Packard (HPQ) -21.5% $20.37 $52.46

Bank of America (BAC) -27.4% $11.55 $52.57

Source: S&P Dow Jones Indices



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