One stock is responsible for a big chunk of the Dow's gains this year

BoeingA Boeing 737-Max

  • Boeing has accounted for nearly 30% of the year-to-date rise in the Dow Jones Industrial Average.
  • Without Boeing’s contribution, the index’s YTD return of 11.5% would fall to 8%.
  • Boeing has the largest weight in the DJIA at 11.5%.
  • Watch Boeing trade live.

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.

DJIA YTD attributionBespoke 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 $US400.

Unlike the Dow, the S&P 500 is weighted by market cap, meaning Microsoft the heaviest weighting. By comparison, Boeing commands the 15th biggest weighting of S&P 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 January 30, Boeing reporting strong quarterly results, with annual revenues topping $US100 billion for the first time. The company forecast full-year 2019 earnings of between $US19.90 and $US20.10 a share, well ahead of Wall Street expectations.

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