RSS
Should Apple join the Dow?
The tech giant is conspicuously absent from the world's most widely cited stock index, and some say it's time for Apple to take its rightful place at the top
Traders work below the Dow Jones Industrial Average ticker at the New York Stock Exchange July 13: Experts say it's time for Apple to join the venerable index.
Traders work below the Dow Jones Industrial Average ticker at the New York Stock Exchange July 13: Experts say it's time for Apple to join the venerable index.
AP Photo/Bebeto Matthews
A

pple is the world's most valuable company, but you wouldn't know it from looking at the Dow Jones Industrial Average, the venerable index that serves as a gauge for the health of U.S. markets. The 30 big-time companies that make up the Dow — including industrial heavyweight General Electric, oil titan ExxonMobil, and fast-food king McDonald's — generally lead their sectors. But the Dow's tech companies, like Hewlett-Packard, have notably lagged behind Apple. Why is Apple excluded? The Dow is price-weighted, meaning it's pinned to the ups and downs of share prices, and Apple's share price is in the stratospheric $600 range. In other words, Apple would overwhelm the Dow, making it more of an Apple index than a national index. However, that might all change soon: A new report from the analyst Bernstein says the timing is ripe for Apple to perform a stock split, in which Apple would cut its share price while issuing more shares, potentially making the company eligible for the index. Should Apple join the Dow?

Yes. The Dow is where Apple belongs: As the world's most valuable company, Apple clearly belongs in the "exclusive club of 30" known as the Dow, says Paul R. La Monica at CNN Money. Apple is "more relevant that any of the other techs already in the Dow," and that includes IBM and Microsoft. If Apple were to split its shares 6-1, "that would knock the price down to a little higher than $100," which would be "tolerable to the people in charge of running the Dow."
"Could Apple finally land in the Dow?"

And joining would boost markets: This should have happened years ago, says Roben Farzad at Bloomberg Businessweek. Think about it: "A more timely inclusion of Apple into the Dow might well have brought the index to all-time highs by now." It would have been great "to hear the evening news lead with that much-needed milestone" in 2007, 2008, or 2009, particularly since Apple "managed to pull off the bulk of its success precisely as the market and economy went to hell." Apple is the "best, proudest thing corporate America" has going for it, and the Dow should reflect that.
"Will Apple join the Dow, finally?"

But Apple has enough on its plate already: "Apple's got other things on its mind these days," says Paul Vigna at The Wall Street Journal. The company is "locking horns with Samsung in court, figuring out what to do or not do with its $100 billion plus cash hoard," and possibly planning the launch of a rumored iPhone 5 this fall. "So, we'd imagine the company isn't thinking about whether or not it might be added to, or belongs in, the Dow."
"Apple in the Dow? 'Pure speculation,' S&P Dow Jones indices says"

EDITORS' PICKS

THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER

Subscribe to the Week