The Dow Jones Industrial Average (DJIA) is getting a modern update with the addition of Amazon, replacing Walgreens Boots Alliance. This move is seen as an attempt to modernize the Dow and potentially reverse its recent underperformance compared to the S&P 500. Over the past year, Amazon's shares have surged more than 80%, contributing to the S&P 500's new highs, while the Dow has struggled to keep up.
The Dow, with only 30 components, is weighted by the share price of individual stocks rather than the companies' total market value, leading some investors to view it as a poor representation of the American stock market. The addition of Amazon, a tech giant often classified as a consumer discretionary stock, is expected to help bridge the gap between the Dow and the S&P 500, which has more exposure to fast-growing tech companies.
Despite the addition of Amazon, the Dow is still considered underweight in tech compared to the S&P 500. Over the past 12 months, the S&P 500 has outperformed the Dow, with a 28% gain versus the Dow's 19%. The correlation between the two averages is also at a low point since 1926.
Movers of the hour:
Butterfly Network is up 38.44% at $1.41.
Krystal Biotech is up 36.62% at $152.10.
Agiliti is up 29.19% at $9.87.
R1 RCM is up 29.14% at $14.34.
Altimmune is up 24.95% at $11.50.
Here are the top stocks upgraded by Wall Street analyst: