“Apple is the world’s most valuable company. The Dow Jones industrial average is probably the world’s best-known stock index,” Christina Rexrode reports for The Associated Press. “So don’t they deserve each other?”
“Consider this: If Apple had been added to the Dow in June 2009, the last time there were serious rumors that it would happen, the average would be about 2,500 points higher than it is today and well above its all-time high,” Rexrode reports. “But if you think the time is right for an Apple-Dow marriage, don’t check your mailbox for a wedding invitation. Apple, which redefined how people listen to music and reinvented the cellphone, is simply too hot for the Dow.”
Rexrode reports, “In 2009, when a bankrupt General Motors and a hobbled Citigroup were booted from the Dow and Apple was talked about as one replacement, Apple stock traded at about $144. On Wednesday, it closed at $569. Because of how the Dow is calculated, Apple would dwarf the other stocks in the average and distort the Dow from its purpose — which is to reflect the broad economy, not represent the hottest stocks… ‘It wouldn’t be the Dow Jones industrial average,’ says Nicholas Colas, chief market strategist at ConvergEx Group. ‘It would be the Apple Plus Some Other Stuff Index.'”
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