On January 5, 2015, Yahoo!Finance published an article titled “CAT Crushing the Dow” in which it indicated:
“Caterpillar (CAT) is getting smacked down by nearly 4% adding considerably to the Dow's (^DJI) pain. The earth moving machine maker was downgraded to underweight from neutral by analysts atJPMorgan (JPM). The team notes that crude is now down some 50% and that's probably going to be a headwind for companies like CAT that make machines that in part help other companies find oil. Beware of obvious downgrades in skittish tapes.”
On the surface, the fact that CAT ultimately closed down –5.28% clearly impacted the Dow. In fact, CAT was the stock that had the largest percentage decline of all the stocks in the index. However, looking at the stocks that are part of the Dow Jones Industrial Average and noting that it is a price weighted index we can easily see that far from “…adding considerably to the Dow’s pain…”, CAT was merely a footnote in the decline of the index.
Below is the ranking of the Dow stocks from the most impact to the least for January 5, 2015.
| Symbol | Name | Price | pt. decline | % decline | % impact on Dow |
| V | Visa Inc. | 259.17 | -5.85 | -2.21% | 20.72% |
| GS | Goldman Sachs Group, Inc. | 188.34 | -6.07 | -3.12% | 11.05% |
| MMM | 3M Company | 160.36 | -3.7 | -2.26% | 7.94% |
| IBM | IBM | 159.51 | -2.55 | -1.57% | 7.81% |
| BA | Boeing Company | 129.05 | -0.9 | -0.69% | 5.06% |
| UTX | United Technologies | 113.12 | -1.92 | -1.67% | 3.92% |
| CVX | Chevron Corporation | 108.08 | -4.5 | -4.00% | 3.67% |
| TRV | Travelers Companies, Inc. | 104.17 | -1.27 | -1.20% | 3.32% |
| JNJ | Johnson & Johnson | 103.79 | -0.73 | -0.70% | 3.27% |
| HD | Home Depot, Inc. | 101.26 | -2.17 | -2.10% | 3.16% |
| UNH | UnitedHealth Group | 99.12 | -1.66 | -1.65% | 3.01% |
| NKE | Nike, Inc. | 93.5 | -1.53 | -1.61% | 2.68% |
| DIS | Disney Company | 92.38 | -1.37 | -1.46% | 2.62% |
| MCD | McDonald's Corp. | 92.23 | -1.03 | -1.10% | 2.60% |
| AXP | American Express Company | 90.56 | -2.46 | -2.64% | 2.54% |
| XOM | Exxon Mobil Corporation | 90.29 | -2.54 | -2.74% | 2.53% |
| PG | Procter & Gamble Company | 90.01 | -0.43 | -0.48% | 2.46% |
| CAT | Caterpillar Inc. | 87.03 | -4.85 | -5.28% | 2.41% |
| WMT | Wal-Mart Stores Inc. | 85.65 | -0.25 | -0.29% | 2.22% |
| DD | du Pont de Nemours | 71.72 | -1.99 | -2.70% | 1.59% |
| JPM | JPMorgan Chase & Co. | 60.55 | -1.94 | -3.10% | 1.14% |
| MRK | Merck & Co. Inc. | 58.04 | 0.85 | 1.49% | 1.00% |
| VZ | Verizon Communications Inc. | 46.57 | -0.39 | -0.83% | 0.66% |
| MSFT | Microsoft Corporation | 46.33 | -0.43 | -0.93% | 0.65% |
| KO | Coca-Cola Company | 42.14 | 0 | 0.00% | 0.54% |
| INTC | Intel Corporation | 35.95 | -0.41 | -1.13% | 0.39% |
| T | AT&T, Inc. | 33.55 | -0.32 | -0.94% | 0.34% |
| PFE | Pfizer Inc. | 31.16 | -0.17 | -0.54% | 0.30% |
| CSCO | Cisco Systems, Inc. | 27.06 | -0.55 | -1.99% | 0.22% |
| GE | General Electric Company | 24.6 | -0.46 | -1.84% | 0.19% |
Of the 30 stocks, CAT was ranked 18th in terms of impact on the decline in the index. This is a far cry from dragging the Dow lower. What is most interesting is that the decline of Boeing (BA) had nearly four times the impact on the index than did CAT even though BA declined only -0.69%.
What investors really don’t want or need is for the first five stocks (V, GS, MMM, IBM, BA) to have a bad day at the same time as these stock comprise 52% of the Dow’s movement.