A Last Look at the Dow in 2012

Now that 2012 has come to an end, let's take one last look at the year and how the Dow Jones Industrial Average (^DJI 0.66%) and a few of its components performed during the past 12 months. During 2012, the Dow rose by 7.26%, and 25 of its 30 components managed to end the year in the green. But while only five stocks lost value during the year, the Dow itself managed to outperform exactly half of the stocks that make up the index on a strict price return basis.

The three worst-performing Dow components of 2012 were Hewlett-Packard (HPQ 0.72%), which lost 44.68% of its value; Intel (INTC -0.71%), which saw shares drop 14.97%; and McDonald's (MCD 0.35%), which experienced a 12.08% decline.

The main driver against Hewlett-Packard was the rise of tablet and smartphone computing. Although tablets and smartphones have been on the market for a number of years, 2012 was the year we saw mass adoption of these devices, and as consumers shift their interest from the personal computer to more mobile devices, we saw less discretionary income spent on the desk-bound devices we once all knew. PC growth rates for the past two years have been below 2%, and some believe it will turn negative in the coming years.

The three best performing Dow components of 2012 were Bank of America (BAC 3.66%), Home Depot (HD 0.65%), and, because of a strong performance yesterday, Walt Disney (DIS -0.21%), which managed to sneak ahead of JPMorgan Chase (JPM 1.77%). Both of the Dow banking stocks crushed the markets overall, as Bank of America increased in value by 108.81% and JPMorgan's stock rose by 32.24%. Home Depot managed to increase in value by 47.12%, while Mickey Mouse and the crew increased their value by 32.77% over the past 12 months.

It's rather remarkable for that any company that had a market capitalization of nearly $60 billion at the start of the year would more than double in value over just 12 months. But now that Bank of America's market capitalization is $125 billion, some believe the bank could double again in the coming years.

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