DJIA being supported by Apple Inc. (NASDAQ:AAPL)

Should the Dow Jones industrial average be down much more aggressively this year than it is already? 

Currently, the Dow Jones industrial average is down less than 0.25% YTD, but revenues have contracted by 8.64% on average for the first three quarters of the year while earnings have contracted by 3.54% on average, suggesting that the Dow Jones industrial average should be down more than it is.

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Quarter by quarter illustrations are offered in the charts at the bottom of this article.

When we peel back the layers we concede that Apple Inc. (NASDAQ:AAPL) has consistently been at the top of the list in terms of revenue growth and earnings growth while both Chevron Corporation (NYSE:CVX) and Exxon Mobil Corporation (NYSE:XOM) have been at the bottom of the list, which isn't a surprise given the weakness in oil and oil related stocks this year.

The observations below are important because they demonstrate a risk that many investors do not currently recognize.  Institutional investors are also falling prey to this same thing because they are discounting the earnings and revenue weakness as being transitory until oil begins to recover.

That begs the question; would there be weakness if we removed Exxon and Chevron from the equation?

The answer is yes.  For example, if we remove Exxon and Chevron from the third quarter results EPS growth for the Dow Jones industrial average still contracts by more than 5% while revenue contracts by 1.8%.  Every quarter this year growth has deteriorated, it clearly looks much worse with Exxon and Chevron included, but the growth rate of the Dow Jones industrial average is deteriorating even with those two companies excluded.

Complete details can be found on our Earnings Analysis Page

DJIA EPS Analysis

DJIA EPS Analysis

DJIA EPS Analysis

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