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Dow Jones Indexes launches new Dow Jones U.S. Economic Stimulus index
By Jennifer Chiou
New York, May 27 - Dow Jones Indexes announced the unveiling of the Dow Jones U.S. Economic Stimulus index, which aims to capture the momentum of the American Recovery and Reinvestment Act of 2009.
The index measures the performance of leading U.S. companies drawn from industries that are expected to receive stimulus dollars from the American Recovery and Reinvestment Act, according to a news release.
The 50-stock index seeks to capture the effect of the stimulus package and its effect on the largest and most liquid stocks in six economic segments, the release added. Those six core categories include alternative energy, construction & materials, energy grid, environment, technology and telecom/internet.
"The American Recovery and Reinvestment Act represents a significant strategic investment in the U.S. economy and as such is anticipated to have a positive impact on the stock market, which is an indicator of economic health," president Michael A. Petronella noted in the release.
"Applying a systematic methodology and blue-chip approach to the segments of the American Recovery and Reinvestment Act makes the Dow Jones U.S. Economic Stimulus index an attractive underlying for investment products such as exchange-traded funds."
To be eligible for inclusion, a company must be a component of the Dow Jones U.S. Total Stock Market index, must have a three-month minimum average daily trading volume of $5 million and must be categorized in one of the six categories.
The top five index components by free-float market capitalization are Microsoft Corp. (technology), AT&T Inc. (telecom/internet), General Electric Co. (alternative energy), International Business Machines Corp. (technology) and Cisco Systems Inc. (telecom/internet).
Since its inception on Dec. 31, the Dow Jones U.S. Economic Stimulus index is up 1.62% as of May 26, the release added.
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