WHAT’S IN THE DOW?

what haphazard weighting given to the constituent stocks — IBM is worth almost 10 percent of the Dow’s entire value, whereas Alcoa’s share has withered to 0.4 percent. This criticism also applies to capitalization-weighted indicators such as the Standard & Poor’s 500. Some newer indexes treat each stock the same. This approach is arguably more logical and provides a positive rebalancing impact over time — to get back to equal weightings, you need to take some profit on the hot stocks and reinvest in the laggards.

Yet despite its flaws, the Dow Jones industrial average is inseparable from the stock market.

This largely reflects historical relevance — long-time investors can still recall landmark dates and events, such as when the Dow first crossed 1,000 (November 1972), suffered its biggest one-day plunge (a loss of 22.6 percent on Oct. 19, 1987) or bottomed during the latest bear market (around 6,500 in March 2009). Try that with other indicators, and you’ll come up with mental blanks. Here are the Dow index’s current 30 companies and their weightings. Company IBM Chevron 3M Boeing United Technologies McDonald’s Johnson & Johnson Exxon Mobil Caterpillar Travelers Procter & Gamble Home Depot American Express UnitedHealth Group Walmart Stores Disney Dupont JPMorgan Chase Merck Verizon Coca-Cola AT&T Microsoft Pfizer Cisco Systems General Electric Intel Hewlett-Packard Bank of America Alcoa Weight 9.6% 6.2% 5.9% 5.5% 5.4% 4.9% 4.5% 4.4% 4.4% 4.2% 3.9% 3.8% 3.8% 3.8% 3.7% 3.3% 2.9% 2.6% 2.4% 2.4% 1.9% 1.7% 1.6% 1.4% 1.2% 1.2% 1.1% 1.1% 0.7% 0.4%