What Are the Dow Components?
Comprised of 30 companies, the Dow Jones Industrial Average (DJIA) is no longer just an industrial-based economic indicator. The DJIA is now the home for manufacturing, financial services, entertainment and information technology companies.
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Components
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As of 2009, the Dow is comprised of the following companies: 3M, Alcoa, American Express, AT&T, Bank of America, Boeing, Caterpillar, Chevron, Cisco Systems, Coca-Cola, DuPont, ExxonMobil, General Electric, HP, Home Depot, Intel, IBM, Johnson & Johnson, JP Morgan Chase, Kraft, McDonald's, Merck, Microsoft, Pfizer, Procter & Gamble, The Travelers Companies, United Technologies, Verizon, Wal-Mart, Walt Disney.
Sectors
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While initially an industrial index, the following areas make up the current Dow sectors: 6.6 percent basic materials, 6.6 percent capital goods, 10 percent conglomerates, 10 percent consumer/non-cyclical, 6.7 percent energy, 13.3 percent financial, 10 percent healthcare, 17 percent services and 20 percent technology.
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Newest Additions
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On June 8, 2009, Cisco and The Travelers Companies were added to the DJIA. They replaced General Motors (GM) and Citigroup. GM was a Dow component for 84 years.
Dogs of the Dow
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According to DowJones, the Dow 5 and the Dow 10 Index family generally reflects the "Dogs of the Dow" stock-picking investment strategy, which was introduced in the early 1990s by money manager Michael B. O'Higgins in his book, "Beating the Dow."
Component Change
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When the Dow changes components, a five-day lag time between the announcement and implementation allows funds that invest in the index to buy the new stock and sell the old stock.
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