NEW YORK, December 30, 2002 - Dow Jones Indexes announced changes in the stock components of the Dow 10 and Dow 5 Indexes, which are subsets of the Dow Jones Industrial Average.
General Electric Co. will replace Merck & Co. Inc. in the Dow 10 Index and also will replace Eastman Kodak Co. in the Dow 5 Index. The changes are a result of the annual rebalancing of the indexes and will be effective with the opening of trading on Thursday, January 2, 2003.
The Dow 10 Index measures the performance of the ten highest yielding stocks in the Dow Jones Industrial Average, a strategy commonly referred to as the "Dogs of the Dow" and which typically entails holding these 10 Dow stocks for one year. The Dow 5 Index tracks the performance of the five lowest-priced stocks of the Dow 10 Index.
The Dow 10 and the Dow 5 Indexes are calculated using an equal-weighted methodology. A watch list for the indexes is published monthly at djindexes.com. Normally, however, component changes are made only at year end for the following calendar year. The indexes are available on both a Price Return and Total Return basis back to Dec. 31, 1986.
A watch list is generated at the end of each month after the top ten yielding stocks are selected for that year. In case of a component change in the Dow Jones Industrial Average, the highest-ranking company on the most current watch list will be added to the Dow 10 and The Dow 5 index at the weight of the departing company.
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