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Dow 10K's Hottest Stocks: Where Are They Now?

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Dow 10K's Hottest Stocks: Where Are They Now?

The markets are on fire. After stalling in the new year following the post-election rally late last year, the markets have resumed their rally. The Dow Industrials has gone past the psychological barrier of 20,000 for the first time ever.

Old economy stocks and financials were standout gainers, propping up the markets, as major averages ease into unchartered territory. Meanwhile, consumer stocks were laggards in the recent rally.

It took the Dow nearly eighteen years to add another 10,000 to it after scaling the 10,000 barrier and settling above it for the first time on March 29, 1999. Earnings and M&A news provided a final thrust to the average back then after the index moved tantalizingly close to the level for about two weeks. The index ended the session at 10,006.78 and stayed above the level for about one and a half year.

Fueling The Dow 10K

The Dow rally at that time was fueled by strong gains by pharma, technology, industrial and consumer stocks. Among the stocks that ran up strongly in the run up to the Dow's breach above 10,000 were:

  • General Electric Company (NYSE: GE).
  • International Business Machines Corp. (NYSE: IBM).
  • Johnson & Johnson (NYSE: JNJ).
  • McDonald's Corporation (NYSE: MCD).
  • Merck & Co., Inc. (NYSE: MRK).
  • United Technologies Corporation (NYSE: UTX).
  • Wal-Mart Stores Inc (NYSE: WMT).

Note: Performances since the second half of 1998 until March 1999 were taken for gauging the impact of the index components on the index' move above 10,000. Among those which made up the index components in 1999, AlliedSignal was subsequently acquired by Honeywell International Inc. (NYSE: HON) and Union Carbide has become a wholly-owned subsidiary of Dow Chemical Co (NYSE: DOW).

Dow 10K And Beyond

With the Dow having gained 100 percent since March 1999, let us look at how the index components that had fueled the climb above the 10,000 level fared during the same period:

  • General Electric has also gone through transformation, having shed all its non-core financing businesses and positioning itself as a digital industrial company. GE shares are down about 20 percent even as the Dow has raced through to double itself.
  • IBM, originally known for its personal computers was forced to sell its PC business to Lenovo Group Limited (ADR) (OTC: LNVGY). Having evolved over the years, the company is now more into services. The shares of IBM were up 98 percent.
  • Pharma giant Johnson & Johnson has seen its share gallop 138 percent.
  • McDonald's is a quick service restaurant chain, operating globally. Its shares have jumped 165 percent.
  • Pharma company Merck has shed over 25 percent over the period.
  • United Technologies, an industrial company qualifying as a conglomerate by virtue of it having diverse businesses in fold, has outperformed the Dow during the period, as its shares have rallied about 232 percent.
  • Wal-Mart is a retail behemoth, operating as a chain of hypermarkets, discount department stores and grocery stores. The company has the distinction of being the largest by revenue in the world and the largest private employer. Wal-Mart shares have gained only 41.52 percent over the period.

Image Credit: By Christine Puccio from San Francisco (RHT TIcker) [CC BY-SA 2.0], via Wikimedia Commons

Posted-In: Dow 10K Dow 20KTopics Top Stories Markets Trading Ideas General Best of Benzinga

 

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