A single company, Boeing, has accounted for nearly 30% of the Dow Jones Industrial Average’s year-to-date gain of 11.5%, according to Bespoke Investment Group.
Boeing shares have soared 34% this year, contributing 812 points of the index’s 2,807-point gain so far this year. Without Boeing’s contribution, the index would be up about 8% YTD.
(Bespoke Investment Group)
The index’s outsized gain is driven by Boeing having the heaviest weighting, 11.4%, among the Dow’s 30 stocks. The Dow is a price-weighted index, meaning the company with the highest share price, Boeing, has the heaviest weighting. Boeing’s stock price is the highest in the index and the only one over 0.
Unlike the Dow, the SP 500 is weighted by market cap, meaning Microsoft has the heaviest weighting. By comparison, Boeing commands the 15th biggest weighting of SP 500 names.
Such effects cut both ways and a 10% move in Boeing’s stock would move the DJIA index by over 250 points. The second-highest contributor to the Dow is Goldman Sachs, responsible for about 8% of the YTD gain.
Boeing shares were trading near all-time highs thanks to strong fundamentals and solid earnings growth based on the planned launch and development of the 777X, the largest and most-efficient twin-engine plane.
On Jan. 30, 2019, Boeing reporting strong quarterly results, with annual revenues topping 0 billion for the first time. The company forecast full-year 2019 earnings of between .90 and .10 a share, well ahead of Wall Street expectations.
This article originally appeared on Business Insider. Follow @BusinessInsider on Twitter.
