Apple in the Dow

Apple is one of the leading lights of the American business community, with the largest market capitalization of any corporation in the nation. At the moment, the electronics giant is closing in on a market cap of nearly $400 billion, putting it narrowly ahead of second-place ExxonMobil and more than $100 billion ahead of third-place Microsoft. Yet it's not, contrary to what many investors believe, one of the 30 stocks in the Dow Jones industrial average.

Why is that? In a letter to its clients yesterday, Bespoke Investments pointed out that Apple is just too big for the Dow - not its overall market cap, but its share price. Apple shares are now trading at around $420, which would be by far the largest in the Dow. Since the index weights its stocks by share price, Apple's ups and downs would dominate the Dow's price movements.

The highest share price in the Dow right now belongs to IBM, which is trading at about 175, or around 40 percent of Apple's price. The lowest? Bank of America closed yesterday at less than 7, which means its overall affect on the Dow Jones average is virtually nil.