Apple in the Dow?

When the rumor surfaced a couple of weeks ago that Apple might be added to the venerable Dow Jones Industrial Average, Apple’s price rose on the news. One might think that Apple, the very epitome of a modern, 21^st-century corporation, might have nothing to gain from the Dow, which dates back to the age when investors followed their stocks via tickertape rather than online portfolios. 

But still, the stock rose by 2.6 percent on the day the rumor was printed by several reputable publications, following a supposition by Sanford Bernstein that Apple might be getting ready to join the Dow. other stocks have been added to the Dow without seeing such a bump; what's different about Apple?

Primarily, it's because membership in the Dow would likely be accompanied by a stock split. Apple’s share price is currently riding at over $630. The Dow weights its components by simple share price, which means that if Apple joined the index right now, it would have as much influence on it as the entire bottom half of the Dow stocks combined. IBM, with the largest share price of all the current Dow stocks, carries about a third of Apple’s weight.