What is the Dow Jones Industrial Average

Definition

The Dow Jones Industrial Average, more frequently know simply as the Dow or the Dow Jones, is a stock market index made up of 30 of the largest publicly owned companies based in the United States. It is a price weighted index meaning that the index’s price is an average of the price of the 30 stocks that make it up. Though it is price weighted, this does not mean that every time there is split the index is completely changed, as they have factors to keep the value of the index consistent.

DJIA_historical

The Dow Jones Industrial Average was first calculated on May 26, 1896 by Charles Dow and one of his business associates, statistician Edward Jones. It is the second oldest U.S. market index, though the contents of the index have changed multiple times. Its purpose was as straightforward as it was revolutionary: At the time, everyone who wanted to know how the stock market was doing had to filter through numerous newspapers, journals, and hearsay, which was a huge amount of information that was very difficult to process. Dow and Jones built the averages as a “market thermometer”, so a casual observer could see whether the markets as a whole were moving upwards or downwards over a given day.

The average is not a simple average of the prices of all of its components; rather it is a weighted average taking into account the differences in stock prices of all companies it tracks, and measures the change of the group as a whole. By choosing the largest and most stable companies in each of the main industrial sector, the average acts as a stable indicator to how the markets as a whole are performing.

While there are not many companies in the Dow, it is made up of some very large, and very stable, Blue Chip Stocks. Since these businesses have proven their value over time, the ups and downs of the Dow can be a very strong indicator of investor sentiment across the entire economy.

Current Companies in the DOW:

Symbol Company Name Quotes and Charts
AAPL Apple Inc. Click Here For Quote, Chart, And More!
AXP American Express Co Click Here For Quote, Chart, And More!
BA Boeing Co Click Here For Quote, Chart, And More!
CAT Caterpillar Inc. Click Here For Quote, Chart, And More!
CSCO Cisco Systems Inc. Click Here For Quote, Chart, And More!
CVX Chevron Corp Click Here For Quote, Chart, And More!
DD E I du Pont de Nemours and Co Click Here For Quote, Chart, And More!
DIS Walt Disney Co Click Here For Quote, Chart, And More!
GE General Electric Co Click Here For Quote, Chart, And More!
GS Goldman Sachs Group Inc. Click Here For Quote, Chart, And More!
HD Home Depot Inc. Click Here For Quote, Chart, And More!
IBM International Business Machines Corp Click Here For Quote, Chart, And More!
INTC Intel Corp Click Here For Quote, Chart, And More!
JNJ Johnson & Johnson Click Here For Quote, Chart, And More!
JPM JPMorgan Chase and Co Click Here For Quote, Chart, And More!
KO Coca-Cola Co Click Here For Quote, Chart, And More!
MCD McDonald’s Corp Click Here For Quote, Chart, And More!
MMM 3M Co Click Here For Quote, Chart, And More!
MRK Merck & Co Inc. Click Here For Quote, Chart, And More!
MSFT Microsoft Corp Click Here For Quote, Chart, And More!
NKE Nike Inc. Click Here For Quote, Chart, And More!
PFE Pfizer Inc. Click Here For Quote, Chart, And More!
PG Procter & Gamble Co Click Here For Quote, Chart, And More!
TRV Travelers Companies Inc. Click Here For Quote, Chart, And More!
UNH UnitedHealth Group Inc. Click Here For Quote, Chart, And More!
UTX United Technologies Corp Click Here For Quote, Chart, And More!
V Visa Inc. Click Here For Quote, Chart, And More!
VZ Verizon Communications Inc. Click Here For Quote, Chart, And More!
WMT Wal Mart Stores Inc. Click Here For Quote, Chart, And More!
XOM Exxon Mobil Corp Click Here For Quote, Chart, And More!

 

 

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1 of 3) How many companies are in the Dow-Jones Industrial Average?
2 of 3) What is the DJIA named after?
3 of 3) General Electric (GE) is the only original component still in the DJIA. Use the "Historical" tab of the Quotes tool to find GE's opening stock price on December 31st, 2014

GE

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