DJIA will have 3 of the magnificent 7 in it once this change takes place:
- MSFT
- AAPL
- and now AMZN
I had the heads up on changes to the DJIA earlier in the month:
As part of the changes Uber will join the DJ Transportation Average.
The DJIA is weighted by share price, not by market capitalization.
- its calculated by adding the prices of the 30 stocks and dividing by a factor that accounts for changes like stock splits and index entrants
- companies with a higher share price have a greater effect on index moves, regardless of their total market value.
This methodology of calculating the Dow's value is very unlike the S&P 500 and the Nasdaq Composite, these two assign weightings based on market capitalizations
