The Dow Jones Industrials (DJINDICES: ^DJI ) fell 14 points as of 11 a.m. EDT to retreat a bit from their record-high close yesterday. Even as some market analysts conclude that the bull-market move in the Dow has come too far too fast, stocks remain resistant to anything more than mild downward moves. Meanwhile, Apple's (NASDAQ: AAPL ) seven-for-one split of its shares, which took effect Monday, has raised more speculation about whether the top stock in the U.S. market will join the Dow, even as Intel (NASDAQ: INTC ) and Cisco Systems (NASDAQ: CSCO ) are moving higher today to make their cases to remain among the index's 30 components.
The case for Apple to join the Dow is fairly simple: it's the largest stock in the market, and the single remaining impediment to its membership disappeared as a result of the stock split. Apple's share price is now between $90 and $100, putting it in the middle of the pack of Dow components and preventing it from having an outsized influence on the average as a whole. By contrast, Intel and Cisco are among the lowest-priced stocks in the Dow and have very little weight among their peers.
But the incumbent tech stocks aren't giving up their places without a fight. Intel jumped 1.25% this morning, reflecting some of the enthusiasm investors are feeling for its recent efforts to become more relevant in the mobile-device space. Thanks in part to its 14-nanometer FinFET process technology, Intel is working on new lines of full-system chip platforms that can support the widest range of applications, ranging from high-end mobile devices to more economical lower- and middle-end tablets with price points that are attractive to users around the world. Intel still has a long way to go to catch rivals that got a big head start in the mobile space, but it has also established that it isn't going to miss the boat entirely on this opportunity.
Cisco Systems gained 0.75% this morning, as it noted the trend toward greater Internet traffic that could help drive its networking equipment business. Cisco said it expects that within four years as much as 84% of Internet traffic will come from video, up from 78% currently. With increasing demand for video content, that percentage is only likely to rise further in the years beyond 2018. Cisco isn't the only company addressing the needs of those users, but its hope to widen the scope of connectivity to include its Internet of Things only bolsters the bullish argument for providing more network-friendly products.
It'll be interesting to see which way the committee overseeing the Dow Jones Industrials goes with its big decision. If Apple comes in, it's likely that either Intel or Cisco Systems will get the boot. This move could be a big indicator of whether old-tech companies can successfully make a transition to the new tech world.
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