Meet the Newest AI Stock in the Dow Jones, and the Stock-Split Stock That Could Join the Iconic Index Next
The Dow Jones Industrial Average (DJINDICES: ^DJI) has roots in the 19th century. The index debuted as a daily average of a dozen industrial stocks in 1896, but more companies were added in subsequent years, such that the Dow Jones had 30 components by 1928. The index still tracks 30 companies today, though it is no longer limited to industrial stocks.
The Dow Jones does not have specific eligibility criteria, but the selection committee focuses on companies with three traits: an excellent reputation, sustained growth, and widespread interest among investors. The committee also considers share price when making selection decisions.
To elaborate, the S 500 (SNPINDEX: ^GSPC) and the Nasdaq Composite (NASDAQINDEX: ^IXIC) are weighed by market capitalization, but the Dow Jones is weighted by price. That means higher-priced stocks have the more influence over the index's performance than lower-priced stocks, regardless of what the underlying companies are worth.
Source Fool.com
