Apple has been traded on the NASDAQ exchange since it first went public back in 1980. For most of that time, AAPL has been part of the NASDAQ 100 index, so a gain or loss by the company has an impact on the technology-oriented exchange. A post on Barron’s today posits that Apple, which is now the world’s most valuable company, should be part of the Dow Jones Industrial Average instead.
However, Barron’s thinks that it would be hard to admit Apple or Google to the Dow Jones index considering that the component companies are weighted on the price of their shares. Apple, which has been valued at $580 – $645 over the past few months, would simply “overwhelm” the index with a 26 percent weighting, almost double that of Dow component company IBM. Barron’s notes that Apple’s 9 percent jump in share price after the recent earnings call would have raised the DJIA a full 300 points.
Barron’s suggests that a different weighting, in which the weighting of any stock is capped at an fixed percentage, might be needed for companies like Apple and Google to become part of the Dow Jones Industrial Average.