Dow Jones Index Needs a Shuffle to take Average to 20,000
A year ago United Health Group, Inc. (NYSE: UNH) was added to the Dow Jones Industrial Index (DJIA) to replace Kraft Food, Inc, after Kraft’s plans to spin off its American grocery business. Although UNH only accounted for approximately 3% of the index‘s weighted average, the stock’s 29.6% return was the 4th best stock performer of the 30 stocks in the index contributing to the average’s gain of 9.06% since being added through to yesterday’s close. Below is the performance of the Dow Jones Industrial Average and the 30 components since UNH was added on September 24, 2012. (Clicking on the Corporations’ names are links to Stockdiagnostics.com Charts of each stock through the date of the change on September 2012).
| Ticker | Company | 9/21/12 | 8/30/13 | % return |
| BAC | Bank of America | $9.09 | $14.12 | 55.34% |
| BA | Boeing Co. | $68.43 | $103.92 | 51.86% |
| HPQ | Hewlett-Packard | $17.21 | $22.34 | 29.81% |
| UNH | UnitedHealth Group Inc. | $55.50 | $71.74 | 29.26% |
| JNJ | Johnson & Johnson | $66.90 | $86.41 | 29.16% |
| HD | Home Depot Inc. | $58.54 | $74.49 | 27.25% |
| CSCO | Cisco Systems Inc. | $18.34 | $23.31 | 27.10% |
| JPM | JPMorgan Chase | $39.76 | $50.53 | 27.09% |
| UTX | United Technologies Corp. | $78.87 | $100.10 | 26.92% |
| AXP | American Express Co. | $57.11 | $71.91 | 25.91% |
| MMM | 3M Co. | $91.00 | $113.58 | 24.81% |
| PFE | Pfizer Inc. | $23.70 | $28.21 | 19.03% |
| TRV | Travelers Cos. | $67.39 | $79.90 | 18.56% |
| DIS | Walt Disney Co. | $51.94 | $60.83 | 17.12% |
| PG | Procter & Gamble Co. | $67.30 | $77.89 | 15.74% |
| DD | E.I. DuPont de Nemours | $50.03 | $56.62 | 13.17% |
| MSFT | Microsoft Corp. | $30.25 | $33.40 | 10.41% |
| DJIA | Dow Jones Indust Ave | 13,579.47 | 14,810.31 | 9.06% |
| VZ | Verizon Communications | $43.72 | $47.38 | 8.37% |
| MRK | Merck & Co. Inc. | $43.66 | $47.29 | 8.31% |
| CVX | Chevron | $114.02 | $120.43 | 5.62% |
| GE | General Electric Co. | $21.97 | $23.14 | 5.33% |
| MCD | McDonald's Corp. | $91.42 | $94.36 | 3.22% |
| KO | Coca-Cola Co. | $37.24 | $38.18 | 2.52% |
| WMT | Wal-Mart Stores Inc. | $72.68 | $72.98 | 0.41% |
| INTC | Intel Corp. | $22.22 | $21.98 | -1.08% |
| XOM | Exxon Mobil | $89.53 | $87.16 | -2.65% |
| T | AT&T | $36.26 | $33.83 | -6.70% |
| CAT | Caterpillar Inc. | $89.45 | $82.54 | -7.72% |
| IBM | Internat'l Bus Machines | $202.26 | $182.27 | -9.88% |
| AA | Alcoa Inc. | $9.00 | $7.70 | -14.40% |
| KFT | Kraft Foods | $51.93 |
Since Being added to DJIA, Bank of America is Down 63%
Although Bank of America (NYSE: BAC) was the top performing
stock in the chart above with a 55% return, shares are still 63.54% lower since
being added to the Dow Jones Industrial Index on February 19,2008. Chevron was also added to the index on the
same day as Bank of America and CVX shares are 73.38% higher. Since the stocks
were added to the DJIA the index has gained 19.94%.
Prior to United Health Group being added to the Dow Jones
Index, the last change to the index was made on the opening of June 8, 2009
with the addition of Cisco System (NASDAQ: CSCO) and Traveler Cos. (NYSE: TRV).
Since the 2009 change Cisco has gained 23.66% and Travelers is up 105.03%,
while the DJIA is 69.01% higher.
Today’s Dow Jones Industrial index has changed significantly
since its inception to adapt to the changing landscape of America. Alcoa (NYSE:
AA), Caterpillar (NYSE: CAT) and Hewlett-Packard (NYSE: HPQ) are no longer
considered leaders in today’s market place and although HPQ stock has performed
well of late, the stock performance is not indicative of the underlying
business’s future growth. Its time for companies, Google (NASDAQ: GOOG), Apple
(NASDAQ: AAPL) and Wells Fargo (WFC), that dominate the marketplace and the
world economy to be added to the index to help get the index to 20,000 and
beyond.
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