5 Facts About the All-Time High in the DJIA
Dow Jones hits all-time high: Top five facts
The Dow Jones Industrial Average (INDU) (DIA) hit an all-time high on Tuesday. The benchmark has more than doubled since the recession in 2007, and most other global stocks jumped tracking the strong gains in the U.S. markets. Some analysts say the Dow may extend gains as a top is unlikely soon.
Here are five facts about the Dow's journey from the lows in 2007:
1. The Dow Jones Industrial Average (DJIA) took over five years to close above the previous all-time high made on October 7, 2007. The 30-share benchmark closed at 14,253.77 on Tuesday.
2. Because DJIA's upsurge was accompanied by a similar jump in the Dow Jones Transportation Average (DJT) (IYT), which also closed at a record high, the DJIA's surge indicates an uptrend in the U.S. markets . According to the Dow Theory, both indices should move in tandem for clear signals about breakout or breakdown in markets.
3. Industrial stocks (XLI) have led the recovery, followed by consumer services (XLY) (XLP) and technology (XLK). Financials (XLF) are yet to fully recover the points lost during the credit crisis of 2007. IBM (IBM) has led the recovery with a contribution of 941 points. Caterpillar (CAT) (up 507 points) and 3M (MMM) (up 481 points) are the second and third largest gainer.
4. All 30 DJIA components are currently paying dividends.
5. The Dow Jones Industrial Average is a price-weighted index, which means that higher-priced stocks exert more influence on the movement of the index. So, a 1 per cent upward move in IBM (currently the highest priced component) will move the index up nearly 16 points, while that same 1 per cent move in Alcoa (AA) (the lowest priced component) will move the index up only 0.66 of a point. Apple (AAPL), the world's most valuable company for most part of 2012, has never been a part of the 30-shares on the Dow Jones.
Courtesy of Varun Sinha, http://profit.ndtv.com