NEW YORK — It's the granddaddy of stock indexes, a centenarian that is sprightly for its age. Since a near fatal fall in March 2009, it's nearly doubled.
But the Dow Jones industrial average is starting to look frail.
The problem is that the blue-chip index has been relying heavily on just two of its 30 stocks, Caterpillar and IBM. Those companies were responsible for a fifth of the near-doubling in the index. But since it hit a 2012 high on May 1, the Dow has slipped, and the software company and the heavy equipment maker have accounted for half of that decline.
“When you have a couple of very high-priced stocks, they're going to skew things,” says Paul Hickey, co-founder of Bespoke Investment Group, a research firm. For Caterpillar especially, he adds, “economic strength” outside the U.S. has helped.
Now, China is growing at its slowest pace in three years. Other formerly booming markets, like Brazil, have slowed, too. Caterpillar, which makes mining, construction and farming equipment, generates about two-thirds of its revenue abroad.
Meanwhile, many metal and food prices are falling, compounding the company's woes. In the three years through March, the S&P GSCI, a commodity index, has doubled. Since then it's fallen 11 percent.
How much this will hurt the Peoria, Ill., company is unclear. The stock has fallen 20 percent since the Dow's recent peak in May.
IBM Corp., which makes much of its money in software and technology services, is also dropping on fears of slowing growth. It's down 7 percent.
Folks love to use the Dow as a shorthand for stocks, and for the economy as a whole. But for all its august appeal, the nation's oldest major index often reflects the movement of just a few stocks.