Even before Apple Inc. unveiled plans for a stock split, the Dow Jones Industrial Average struggled this year to keep up with its broader counterpart, the S&P 500 index.
The addition of three new components on Monday—when Apple starts trading on a split-adjusted basis—likely won’t help matters.
That is because the revamped Dow industrials put less emphasis on technology stocks, the engine behind the stock market’s rebound from the lows of March. Starting Monday, tech will constitute less than a quarter of the Dow’s weight versus nearly 28% for the S&P 500. The broader index includes Amazon.com Inc., Facebook Inc. and Google parent Alphabet Inc. —none of which are in the Dow.
With millions of people still homebound, technology stocks have been clear winners during the coronavirus crisis. People are working from home, streaming movies and using social media to connect with friends and family, hastening the adoption of tech in their everyday lives. Those changes in behavior have made big tech stocks among the few reliable bets during a crisis that has upended most other businesses.
“With the economy we have now because of Covid-19 and the difference between whether companies are open or not, over the short term we could see a significant variance continuing,” said Howard Silverblatt, a senior index analyst at S&P Dow Jones Indices.