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Dow Reaches a High and Will Hit 15,000 - Here's How

Alex Rosenberg, CNBC Producer
Thursday, 7 Mar 2013 | 11:06 AM ET
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With the Dow Jones Industrial Average at an all-time record high, traders have started to focus on the next key milestone for the blue chip index: 15,000.

So what could bring us there?

Actually, pretty much the same stuff that brought us to our all-time high: big moves in big stocks.

(Read More: The Latest Sure-Fire Economic Indicator? Traffic)

The Dow is a price-weighted index, meaning that each one-point appreciation in one of the 30 Dow stocks translates to a one-point appreciation in the Dow. That means that stocks with high share prices contributed an outsized amount to the Dow's rally.

Think about it this way. If a $10 stock rises 10%, then it will rise by $1, and the Dow will move one point higher. However, if a $100 stock rises 10%, then the Dow just went up ten points on the move.

That explains why we can credit just five Dow stocks for the bulk of the rally since March 9, 2009:

Top 5 Dow Contributors

% Gain Points Contributed
IBM (IBM) 147% 942
Caterpillar (CAT) 277% 508
3M (MMM) 148% 481
Chevron (CVX) 102% 457
United Technologies (UTX) 142% 414
Source: Dow Jones

So what stocks will drive the move up to 15,000?

According to Enis Taner of RiskReversal.com, it very well could be four of those five names, plus Exxon Mobil, that take us to 15K.

So how much would they need to rally?

Well, is the other 25 members stayed here, we would need to see the following gains from those stocks:

Current Price Required Price Required % Gain
IBM (IBM) $208 $215 3%
3M (MMM) $105 $115 10%
Chevron (CVX) $118 $130 10%
United Technologies (UTX) $91 $100 10%
Exxon Mobil (XOM) $90 $100 11%
Source: RiskReversal.com

Of course, predicting the winners is always the tricky part.

  Price   Change %Change
IBM
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MMM
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CAT
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CVX
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XOM
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UTX
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DJIA
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