NEW YORK - Bank of America is now just .5% of the Dow Jones Industrial Average the iconic index. The bank which is the fourth largest bank in the United States by market capitalization has seen its shares plummet in the most recent months as it has headed back to March 2009 prices.
The bank's market capitalization is still a hefty $83 billion meaning it is larger than 15 companies currently in the Dow Jones. Each company in the Dow Jones if it was equal rated would make up 3.33% of the average. If it was market cap weighted than BAC would make up an even larger percentage.
Under the current weighting a 7% drop seen in BAC yesterday lowered the Dow Jones by approximately 5 points. While a 30% move in the stock would only raise the average by 20 points based on Friday's close.
On the other hand the $20 drop seen in Caterpillar a smaller company than BAC since its earnings report has led to a 160 point drop in the Dow,
The bank's market capitalization is still a hefty $83 billion meaning it is larger than 15 companies currently in the Dow Jones. Each company in the Dow Jones if it was equal rated would make up 3.33% of the average. If it was market cap weighted than BAC would make up an even larger percentage.
Under the current weighting a 7% drop seen in BAC yesterday lowered the Dow Jones by approximately 5 points. While a 30% move in the stock would only raise the average by 20 points based on Friday's close.
On the other hand the $20 drop seen in Caterpillar a smaller company than BAC since its earnings report has led to a 160 point drop in the Dow,
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