• Report Highlights Google and Apple as Additions For Dow Jones Makeover

    A recent report by investment newspaper Barrons claims Apple and Google could find themselves inducted into the elusive Dow Jones Industrial Average.

    According to Barrons the index is due for a makeover and the inclusion of Google and Apple would help ensure the Dow stays relevant in the 21st century market. Both companies wield considerable influence in the financial markets (Apple’s earnings reports have a habit of pulling the rest of the market up with it). Apple and Google “represent major shifts in the global business landscape” while current Dow inhabitants like Hewlett-Packard, Bank of America, and Alcoa do not.

    "The guardians of the Dow need to ensure that this benchmark, created in the 19th century, stays relevant for a 21st century market," — Barrons.
    The addition of both companies makes sense, but the actual act of adding Apple and Google to the index isn't so simple. A couple weeks ago a report claimed Apple’s addition to the Dow would send the index above 14,000. Apple’s massive $563 billion market capitalization would equal a 26 percent weighting of the index, more than double the next most influential company IBM (12 percent). Barrons suggested Apple could institute a 5-to-1 or even 10-to-1 stock split to help guarantee itself a spot in the index. Google announced a stock split earlier this year.

    While there is no official timetable set for the Dow Jones makeover, most investors would likely welcome the change sooner or later.

    Source: Barrons [via CNET]
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