An index committee looks for a stock with 'an excellent reputation' and sustained growth that is 'of interest to a large number of investors.'
There has been considerable speculation that Nvidia could replace Intel in the Dow Industrial Average. Decisions on additions and deletions to the Dow is made by the S & P Dow Jones Indices Index Committee. There are no specific rules for inclusion or exclusion. But the committee has said that "a stock typically is added only if the company has an excellent reputation, demonstrates sustained growth and is of interest to a large number of investors.
Finally there is the stock price issue. Unlike the S & P 500, the Dow is price weighted. A stock with a price way below everyone else would essentially become irrelevant in the index, and that is undesirable. UnitedHealth Group is currently the highest priced stock in the Dow, at $516. Intel is currently the lowest price stock in the Dow at $30. That is an unusually wide spread. The average price of the 30 stocks in the Dow is $202.
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