Investor preferences change; Dow Jones rarely outperforms S&P 500 since May

Value stocks have had a strong run since May, with the Dow Jones Industrial Average edging higher and rarely outperforming the S&P 500 Index.

Value stocks have performed strongly since May, with the Dow Jones Industrial Average rarely outperforming the S&P 500 on its way higher.
As of the close on Thursday (9th), the Dow Jones Index had risen for 7 consecutive days to 39387.76 points, up 4.15% since May, while the S&P 500 Index rose 3.54%.
Data shows that only three of the 30 stocks in the Dow Jones Industrial Average have fallen so far in May.
Among them, Intel (INTC-US) dragged down 2.5 points, Disney (DIS-US) and McDonald\’s (MCD-US) dragged down 34.82 points and 33.44 points respectively.
But Amgen\’s (AMGN) stock performance alone could save the day.
Amgen contributed 255.69 points to the Dow in May; Goldman Sachs, Microsoft, UnitedHealth Group and Tuoba each contributed more than 100 points; Amazon and Apple each contributed more than 90 points.
That compares with just 80% of stocks in the S&P 500 index rising.
The worst-performing stocks include EPAM Systems, CVS Health, Qorvo, Expedia, Starbucks, Norwegian Cruise Line Holdings, etc., which all fell more than 10% and are not among the Dow components.
Frank Cappelleri, founder of technical analysis firm CappThesi, told the media: The S&P 500 is weighted based on the market capitalization of the constituent stocks while the Dow is weighted based on the price of the constituent stocks – which means that higher stock prices have a greater impact on the stock index.
In addition, 30% of the stocks in the S&P 500 are technology stocks and 13% are financial stocks.
In comparison, financial stocks account for 24% of the Dow Jones Index and technology stocks account for 19%.
The impact of this weighting method and industry distribution brings about the difference in gains between the two. When value stocks perform better, the performance of the Dow Jones Industrial Average is more outstanding than that of the S&P 500 Index.
John Kolovos, chief technical market strategist at Macro Risk Advisors, believes that the current S&P 500 index is adjusting through time rather than using price adjustments, allowing it to develop into a range trading model.

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