But it isnt. The Dow is the figure we hear on radio and TV to give us a general notion of how the stock market is doing. Comprised of 30 major industrial stocks, it was once a key indicator for the performance of our economy. Now four old economy stocks— Chevron, Goodyear, Sears, and Union Carbide— have been removed and four major new economy stocks have been added— Home Depot, Intel, Microsoft, and SBC Communications.

As earnings go, so go the market returns. While, SBC Communications, the worst performing of the new stocks, provided a total return (price appreciation plus dividends) of 23.38 percent a year, the best of the old stocks provided a return of 19.12 percent. Investors in both Sears and Goodyear would have done better in a 5-year Treasury note— their returns were under 6 percent.

Comparing the In and Out of the Dow Jones Industrial Average

Company Name

Ticker

Industry

EPS Growth 5 Year Mean Est

EPS Growth 3 Year

Tot Ret

5 Year

Microsoft

MSFT

Software

25

48.9

63.70

Intel

INTC

Semiconductors

20

19.6

58.69

Home Depot

HD

Home Supply Stores

24

27.6

38.45

SBC Communications

SBC

Telecommunications

13

NMF

23.38

Chevron

CHV

Oil/Gas

9

12.6

19.12

Union Carbide

UK

Chemicals

8

-20.8

15.23

Sears Roebuck

S

Department Stores

11

-15.9

5.62

Goodyear Tire & Rubber

GT

Rubber Products

10

2.8

5.51

Revving Up The Dow with High Tech

Sector

S&P 500

New Dow

Old Dow

Technology

24.7%

18.8%

11.4%

Telecommunications

8.1%

4.5%

2.2%

What does it mean for you and me?