Friday, October 26, 2012

only 5 matter

The Dow is up 885 points year to date. While there are 30 stocks in the Index, only five really matter to this 7.3% advance on the year. They are Home Depot (NYSE: HD) (164 points), Wal-Mart (NYSE: WMT) (107 points), Disney (NYSE: DIS) (103 points), Travelers (100 points) and JP Morgan Chase (NYSE: JPM) (58 points) ...

These five stocks represent 60% of the Dow's gain this year. The other 25 names are the remaining 40%, but these are the stocks that have the outsized returns (24 to 47% YTD) and sufficiently large stock price to push the Dow Jones Industrial Average higher. Bank of America (NYSE: BAC) is up 68% on the year, but because it is a low-priced stock at $9, its influence on the Dow is just 45 points.

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