The Dow Jones name has wide recognition, particularly for the man in the street who has no particular interest in the stock market. To my mind, by far the most important aspect of the Dow Jones indices in today’s world people who use them to talk about stocks identify themselves at the outset as totally clueless.
The DJI debuted in 1896, as the first index of stock market activity in the US. Its defining quirk is that the weighting of a given stock in the index depends on its per share price, not on its total market capitalization (which is the way more modern indices are constructed). So a company with ten shares selling at $1000 each (= a $10,000 market cap) would have a higher weight than, say, Walmart, which has a market cap of close to half a trillion dollars but whose shares sell for about $175 each.
The plus of the Dow methodology is that the index is easy to calculate by hand. I can see that back when the light bulb was a radical new technology this would have been an important selling point.
When I entered the stock market in 1978, mostly because I needed a job, the DJI still had some significance. It was filled with large, very mature companies. But you knew that when the Dow started to outperform the S&P it meant that the upward move was close to being over. The biggest, stodgiest companies were moving, so this meant there was nothing else left to buy.
In 2011, S&P acquired the Dow indices and began an overhaul aimed, as I see it, at making them relevant once again to people with an interest in stocks. My sense is that this worked for a while. But over the past year, the S&P 500 is +27%, and NASDAQ +39%. The DJI has trailed badly, at +18%.
I think this divergence is the reason for the switch from WBA to AMZN.