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AAA  Mar. 8, 2013
Influential IBM
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IBM is the most important stock in the Dow Jones industrial average. That’s because the index of 30 blue chip stocks is price weighted, meaning each $1 move in a Dow stock has the same effect on the average. Expensive stocks have more power to drive the Dow higher or lower. At $209, IBM is well ahead of Chevron, the second most expensive Dow stock at $118 a share.

IBM’s stock is up 77 percent since the Dow’s pre-recession record high in October 2007. IBM has proven adept at changing to meet its corporate customers’ needs. It’s now a one-stop shop for business software, consulting services, analytical tools and mainframe computers. The approach has proven so profitable that other technology bellwethers such as Oracle, Hewlett-Packard and Dell have been trying to copy IBM with limited success so far.

IBM is confident it will remain ahead of the pack under its current CEO Virginia Rometty. She has said IBM is on track to boost its adjusted earnings from last year’s $15.25 per share to at least $20 per share in 2015.

Associated Press
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