Today’s action exposes the major flaw in the Dow Jones Industrial Average, other than it really being about half industrial stocks. The Dow is price weighted and that means the higher the stock price the more influence it has. For example, the highest priced three stocks are down about 0.5% today on average. The lowest priced three stocks are down 5% at one point before AA came back.
Overall the Dow is down less than 0.5%. This masks the damage done to the banks and part bank GE.
One more reason not to look at the Dow when assessing market trends.
