"A system that worked for over a century may need to be adapted to include higher-priced stocks," says Silverblatt. He acknowledges that changing the DJIA's format won't be easy, which may be why an Apple-friendly alteration hasn't happened yet.

Silverblatt says that any changes "would have to be functional, understandable and maintain the integrity of the index." This is especially important because a large exchange-traded fund, the SPDR DJIA ETF Trust (DIA), known as the Dow Diamonds, and other index funds track the Dow Industrials. If index members are capped in their weighting, there would have to be a rebalancing policy, perhaps annually, to enforce the weightings.

There's precedence for a capped weighting because the Nasdaq 100 index, the basis for the popular exchange-traded fund PowerShares QQQ Trust (QQQ), now limits the weight of any member to 24% after cutting Apple's weighting to 12% from 20% in a surprise special rebalancing last year. A 10% Dow cap could also limit the sizable impact of IBM, if the index's guardians also want to apply a threshold to existing components. If Apple's weighting were capped, only part of its daily moves would be reflected in the Dow.

Another solution would be to scrap the Dow's price weighting entirely and move to a market-cap system like the S&P 500. That, however, would destroy one of the distinctive qualities of the Dow and make it resemble the S&P 500.

None of these ideas, including a capped weighting for Apple, sits well with John Prestbo, the executive director of the Dow Jones Indexes. "It would be a methodological mess," he asserts. "You'd have a 29½-stock index."

"My job and that of the index committee is to administer the Dow so that it does its job of reflecting the stock market, not to get companies into the Dow that people want," Prestbo says. "Everybody is in love with Apple, because it keeps defying gravity. That doesn't mean the Dow isn't doing its job of reflecting the market. Apple certainly qualifies in every respect except one: price."

Prestbo notes that with its limited size, the Dow cannot include all leading companies; Berkshire Hathaway and Comcast (CMCSA), for example, are not included.

The reality, however, is that the Dow amounts to a 20- or 25-stock average now, because the lowest-priced stocks matter little. Bank of America is up 50% this year, the best percentage gain of the Dow 30, but its effect has been minimal because of its low price, chipping in just 20 points, or 2%, of the index's 1010-point gain in 2012. IBM, the key driver in recent years, has led the Dow in 2012, accounting for 16% of the index's rise, even though its percentage gain is a more modest 12%.

Is the Dow broken?

Some agree with Prestbo that it isn't worth tampering with the Dow to include Apple or Google. "The Dow is still a relevant and important indicator that tracks the market closely," says Jeff Rubin of Birinyi Associates, a stock-market-research and money-management firm in Greenwich, Conn. "It's what the individual investor focuses on."

Rubin questions, however, whether the lowest-priced stocks need to be in the index because they have so little impact. He points out that the correlation of the Dow Industrials with the S&P 500 is more than 90%. This means the two indexes tend to move together, although not in lock step. The Dow bested the S&P 500 in 2011, rising 8.4% (including dividends), better than the 2.1% total return in the S&P 500. So far this year, the S&P 500 is ahead, with an 11% gain, 3 percentage points better than the Dow, largely due to Apple's 50% gain.

In the past five years, the Dow, even without Apple, has returned 3% a year, on average, compared with 1% for the S&P.

Prestbo acknowledges the split issue, saying, "If current trends continue unabated, we would have to take action. All 30 stocks must work together to tell the story of the stock market." That could mean the addition of higher-priced stocks such as Berkshire to dilute the impact of IBM, or perhaps even IBM's removal if its stock continues to rise and is not split.

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The fate of the Dow could soon be in the hands of Standard and Poor's because its parent, McGraw-Hill (MHP), agreed last November to form an indexes joint venture with CME Group (CME), parent of the Chicago Mercantile Exchange, which now owns 90% of Dow Jones Indexes. McGraw-Hill would hold 73% of the combined business, CME, 24%, and Dow Jones, 2.6%. Dow Jones, the parent of Barron's, is owned by News Corp (NWS). The deal should close in the next few months, pending antitrust approval.

The Dow has no timetable for shuffling its components, but a new company or two might be added in the coming year, given that the last change occurred in 2009, when Travelers (TRV) replaced Citigroup (C), whose stock had been hammered in the financial crisis and fell below $5, making it meaningless in the average. Citi has since had a one-for-10 reverse split. Since 1991, half of the stocks in the Dow 30 have been replaced.

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