Dow stalwarts lead the blue-chip recovery
IBM, Caterpillar and 3M contribute the most to the Dow's 118% gain since the March 2009 market bottom. Only one Dow stock is lower since then: Hewlett-Packard.
The top six contributors to the 7,700-point gain are giants in corporate America: IBM (IBM), Caterpillar (CAT), 3M (MMM), Chevron (CVX), American Express (AXP) and United Technologies (UTX). And they've been in the Dow for at least 20 years.
IBM went into the Dow in 1932, left in 1939 and returned in 1979. Chevron was a Dow component from 1934 to 1999 and returned in 2008. United Technologies has been in since 1939. The newest member of the top six is American Express. It joined the Dow in 1982.
IBM is up 147% since the market bottom on March 9, 2007. It has contributed more than 944 points to the Dow's gain from the low -- 12% of the total. Caterpillar's contribution is 6.6%. 3M's is 6.2%.
All but one of the 30 Dow stocks have gained since the March 2009 low. The laggard is Hewlett-Packard (HPQ).
On an inflation-adjusted basis, the Dow's performance is not so rosy. Discounted for inflation, the Dow is lower than it was in 2000, The New York Times said on Tuesday. So is the Standard & Poor's 500 Index ($INX).
Still, the market is in pretty good shape. Not only is the Dow at a record level, so are the Dow Jones Transportation Average ($DJT), the S&P Midcap 400 Index ($MID), the S&P Small-cap Index ($SML) and the Russell 2000 Index ($RUT).
The causes for the rally are a stronger economy, given loving stimulus from the Federal Reserve. The Fed has kept short-term interest rates nearly at 0% and pushed the yield on the 10-year Treasury note to 1.894%. The 10-year yield was 4.04% at the end of 2007, before the 2008-2009 market collapse.
The Dow's 30 components are regularly changed. Some merge with other companies. Others go out of business. Today's Dow has five components that weren't in the index when the market crashed in 2008.
Bank of America (BAC) and Chevron replaced Altria (MO) and Honeywell (HON) in early 2008. And, yes, the inclusion of Bank America was ironic because it then required a federal bailout to survive.
Kraft Foods (KRFT) replaced American International Group (AIG) in September 2008.
Traveler's Corp. (TRV) replaced Citigroup (C) and Cisco Systems (CSCO) replaced General Motors (GM) in June 2009.
And UnitedHealth Group (UNH) replaced Kraft in September 2012 after Kraft split itself up.
|Where the Dow's gain since 2009 have come from|
|Company||Tues. close||Contribution to Dow gain|
|Walt Disney Co.||$56.38||4.06%|
|Procter & Gamble||$77.09||3.28%|
|Johnson & Johnson||$77.55||3.08%|
|Bank of America||$11.57||0.78%|
a real scary comment on truly where we stand today:
>>>>>On an inflation-adjusted basis, the Dow's performance is not so rosy. Discounted for inflation, the Dow is lower than it was in 2000, The New York Times said on Tuesday. So is the Standard & Poor's 500 Index (). <<<<<
The Dow sets a record and watch the sour puss Republicans cry.The market will go down.Just as soon as Jeb Bush gets in the WH.Then we can have endless wars, recessions,hate crimes and
tax breaks for the rich.
CRAZY 8: As usual you`re wrong.If a Repub was in office when a record you`d be
dancing in the streets.Of course, the Dow was down 37% with Bush, so no party.
It`s time for you to man up and admit the right guy is in the WH.We don`t need a
loser like Bush.We`re making tons of money and I`m enjoying the nice restaurants
and the like.Sorry you`re on the losing side again.
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Stocks drift lower and bonds are hit as investors await the Fed. Prepare for higher volatility this week.
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