Dow Jones Heavyweights – Caterpillar & Amgen Beat The Street

I suspect that many are aware that unlike most other market indexes, the Dow Jones Industrial Average is price-weighted, meaning that the highest-priced stocks like UnitedHealth Group (UNH), Goldman Sachs Group
GS
(GS) and Home Depot (HD) have a very large impact and lower-priced stocks like Intel
INTC
, Walgreens Boots Alliance (WBA) and Verizon Communications
VZ
are more or less insignificant in that they combined account for just 2% of the 30-member benchmark.

Believe it or not, the Dow is calculated by adding up the price of all 30 components and dividing by a divisor, which on August 8 was 0.15173. This means that a $1 move up or down in the price of a Dow component translates into a 6.6-point move in the index. Obviously, a big change in a stock with a triple-digit stock price will result in a sizable advance or decline in the Dow, and the index was buoyed last week when two of its largest members, construction equipment giant Caterpillar
CAT
and biotech titan Amgen
AMGN
, posted Q2 results that exceeded analyst expectations.