Today, the DJIA includes companies from a range of sectors, including technology, healthcare, and consumer goods. This move allowed the Dow to be more representative of the consumer and healthcare sectors and better reflect the US economy. After underperforming in its sector for several years, the company was replaced with Walgreens. In 2018, General Electric (GE), the last remaining company from Charles Dow’s original selection, was removed from the index. The index’s list of 12 companies grew to 20, then grew to 30, and companies were removed and replaced throughout the years by its averages committee on an ‘as-needed basis’. Since its creation, the DJIA has changed significantly to reflect changes in the economy and the stock market. You can see the companies selected for the index fall into the industrial category, giving more meaning to the word ‘industrial’ in the index’s name.Īnd with that, the Dow Jones Industrial Average was officially established and debuted on May 26, 1896, in The Wall Street Journal. Here are the original 12 companies the Dow first tracked: He selected 12 companies that he believed were representative of the economy at that time including companies like General Electric, American Tobacco, and U.S. Creating the Dow Jones indexĬharles Dow wanted to create a way to track the overall performance of the U.S. The pair, along with their silent partner, Charles Bergstresser, later went on to create The Wall Street Journal. Both shared a fascination with the financial markets and recognized the need for a better, unbiased system of reporting on stocks and other financial instruments.Īfter leaving the Providence Evening Press in 1882, Dow and Jones headed to New York to found their own financial news service, the Dow Jones & Company. Financial journalist, Charles Dow, and statistician, Edward Jones, met in the late 19th century while working at the Providence Evening Press. Like any good story, this one begins with friendship. So who exactly is ‘Dow Jones’? The Dow was named for an existing company, but Dow and Jones were real people that made an unforgettable impact on Wall Street and the investing world. History of the Dow Jones Industrial Average Because indexes like the Dow hold companies from a wide range of economic sectors, investors can gain a quick understanding of how the market is performing and whether a particular section of the economy is weakening.
Investors and financial analysts use the Dow as a benchmark to compare the performance of their own investments or portfolios.
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Whether you call this stock index the Dow, the Dow Jones, DJIA, or by its full and gloriously long name, the Dow Jones Industrial Average is a name you’ve heard at some point or another. It is one of the oldest and most widely-watched stock market indices in the world.
The Dow Jones Industrial Average (DJIA) is a stock market index that measures the performance of 30 large, publicly-owned companies listed on the New York Stock Exchange (NYSE) and the NASDAQ stock exchange. What is the Dow Jones Industrial Average (DJIA)?
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