The two benchmarks have a high correlation despite some key methodology differences. For example, the Dow weights its stocks by share price rather than by market capitalization like the S&P 500 and most other indices. The Dow has 30 stocks while the S&P index holds 500 U.S. blue-chip companies. [Dow ETF Eyes All-Time High]
“It has been a long, grinding recovery, but the private economy is holding its own in the face of very challenging policy and political risks,” said Stephen Wood, chief market strategist at Russell Investments, in a Reuters report on the new Dow high. “There is a lot of momentum and rotation going into equities from cash and bonds, and right now sentiment seems to have the upper hand over fundamentals.”
SPDR Dow Jones Industrial Average ETF
Full disclosure: Tom Lydon’s clients own SPY.