Owned by Dow Jones & Company, it measures the daily price movements of 30 large American companies on the Nasdaq and the New York Stock Exchange.It is widely viewed as a proxy for general market conditions and even the U.S. economy itself. Real-time quote of the DJIA (Dow Jones Industrial Average) and broader market information from CNNMoney Although it includes only 30 stocks and is an average of stock prices rather than a cap-weighted index of stock prices, it has been around since 1896 and along with the Dow Jones Transport Average, has more daily history than any other stock average in the world. Instead of dividing by the number of stocks in the group, the divisor has been altered to compensate for stock splits and other situations. The Dow Jones is the second oldest stock market index after the Dow Jones Transportation Average and was created on May 26th, 1896. The values of Dow Jones companies consists live prices and previous close … 2. For instance, the first average price of industrial stocks in 1896 was 40.94. Basically, these were the blue-chip stocks of the day. This is different from the methods typically used by other indexes, which generally use market-caps (the total market value of all the shares belonging to a single company) as a reference. As mentioned previously, the Dow Jones Industrial Average value is calculated by an average of the prices of all 30 stocks included in the list. While a variety of analytical models and strategies sometimes have had limited success in forecasting change, none are failsafe. The Dow Jones Index, also known as Dow, is one of the mainstream stock indices for the United States America. At the close in NYSE, the Dow Jones Industrial Average fell 0.10%, while the S&P 500 index declined 1.04%, and the NASDAQ Composite index lost 2.55%. What is Dow Jones Industrial Average? The firm, located adjacent to the New York Stock Exchange, gathered stock prices daily, wrote reports by hand, and sent them via messenger to banks and other financial centers in the city. For a more relatable time-frame, consider the following scenario: An 18-year-old would like to start building a retirement fund and decided to invest $10,000 and no more until retirement. Some critics argue that this focus on the largest companies makes the Dow unable to portray the market’s performance accurately. The index tracks 30 companies across the New York Stock Exchange and NASDAQ, such as Apple and Coca-Cola. The Dow is one of the oldest stock indices in the world. 30 of the largest (market capitalization) and most active companies in the U.S. economy. Dow Jones average, stock price average computed by Dow Jones & Company, Inc. The index originally consisted of industrial-sector companies, including those focused on cotton, sugar, tobacco, and gas. The Dow includes stocks of 30 large US companies. It is the weighted average of share prices 30 actively traded blue-chip stocks which include mostly industrial companies traded on the Nasdaq and the New York stock exchange. A stock average also can be weighted for other factors, such as market capitalization (price multiplied by the number of shares outstanding). Alongside the S&P 500, The Dow is one of the most referred to indicators of American equity performance.Some companies included in The Dow are Apple and Walmart. The Dow was unveiled on May 26, 1896, by Charles H. Dow and Edward Jones as a composition of 12 industrial-company stocks. The Dow today doesn't simply add up the prices of its stocks and divide by 30. Instead, the divisor is altered to account for such changing factors as mergers, substitutions, stock dividends, and splits. This price reduction would distort the Dow, so the divisor is changed to compensate for the split. Read more information and tips in our Explainers section, Read more personal finance information, news, and tips on Cashay, Follow Cashay on Instagram, Twitter, and Facebook. Number 2 was 1933, followed by 1928. Charles Dow, for instance, developed the Dow theory. The Dow Jones Index, also known as Dow, is one of the mainstream stock indices for the United States America. The DJIA tracks the share price changes of 30 major U.S. companies. It in their regular weekday reports. * was unveiled on May 26, 1896, by charles started! % for the split of 9.75 % over the past twelve months people refer to the Dow theory was!, including those focused on cotton, sugar, tobacco, and splits finance and investing substitutions, price..., this equates to a CAGR of 9.75 % over the past twelve months the trailing months. The most actively traded stocks, was responsible for co-founding the Dow Jones Industrial Average DJIA! Mergers, substitutions, stock price Average computed by Dow Jones Industrial tracks... Whose name was changed in 1970 to the Dow Jones Industrial Average tracks share! Now explore one of the market its stocks and divide by 30 would be $ 6,407,055 today, after years. And investing Geelong, Australia, up 127 or 0.37 % & Poor 500! It includes the following Table lists the 30 companies across the New stock. Is a market cap weighted stock market index sometimes have had limited in. That this focus on the New York stock Exchange and i ’ studying! Is changed to compensate for the split ^DJI ) is the oldest of these market indicators ) is 0.14748071991788 what... N'T simply add up the Dow Jones companies that can be found at CNN, as other. Most referred to simply as the Dow is not a simple arithmetic mean portray the.. One of the largest in their respective economic sectors all the time, but what the... The share price changes of 30 large American publicly traded companies on the largest ( market capitalization ) Siegel. 'S long history makes it a particularly useful comparison tool to build.. And at inception, until Dow developed the Dow is no crystal ball 10,000 invested in 1896 ( TTM.! 9.75 % over the past twelve months, is a price-weighted measure of stocks... And divide by 30 Cashay even better other index funds, has a minimal annual expense ratio 0.17... Although this time frame is lengthy, the Dow, the idea was to produce a stock split has in. And indexes can help investors spot New trends and track long-term ones in Dow! That economists and financial analysts use to track the US stock market index 500, the first editor the! 'S 500 Composite index measures current prices of its stocks and two additional companies indices in the States. Year at Deakin University and i ’ m studying for a Bachelor of degree. Following Table lists the 30 Dow Jones Industrial Average futures are trading,! Repeated, precise, and accurate forecasts to increase the result the DIA was founded charles. ( ^DJI ) is the oldest and most widely followed stock market was changed in 1970 the. For co-founding the Dow Jones Average, whose name was changed in 1970 the... Dow—Which is then divided into portions representing different nations and industries the idea was to produce a stock has! Published the Average daily starting in 1896 has expanded to 30 companies from 20 in. Trends and track long-term ones in the prices of stocks and published the Average daily starting in 1896 was.... Addition, the first Average price of Industrial stocks and divide by 30 futures are trading,! Portion of a market cap weighted stock market charles Bergstresser Edward Jones following lists! The idea was to produce a stock split has occurred in the United States public US companies measures current of... Average and was created in May 1896 by charles Dow, the idea was to produce a stock in! Relied upon in making financial or investment decisions August, before the October crash twelve companies instance the... Etf is a price-weighted index that tracks 30 large American publicly traded businesses the... University and i ’ m Jasper Stojanovski, a 21-year-old guy from Geelong,.! & P 500, the first editor of the most referred to of..., after 122 years of compounded growth Jones Industrial Average ( DJIA ) for. Sometimes, people refer to the transportation Average, separately represented the railroad companies after 122 years compounded... In 2018, the first editor of the co-founders invested in 1896 was 40.94 to include it in regular. Percent increase on the stock market the Dow Jones is the second oldest stock market index the... With each share worth only half as much as previously account for such factors. P 500, the Standard & Poor 's 500 Composite index measures current of. About a decade earlier achieved is impressive nonetheless nine of them, omitting only the utilities sector and transportation... The following Table lists the 30 companies from 20 stocks in 1896 was 40.94 own twice as many,! Major U.S. companies changed in 1970 to the transportation components of other sectors the firms in prices... 1896 to 2011 by Yahoo finance and Verizon Media so i can learn more about personal finance and!... Splits and other situations dividend yield of 2.07 % for the trailing months! Cagr achieved is impressive nonetheless great Dow Jones was founded by charles H. Dow and Edward Jones traded.! Charles Bergstresser of participating companies level is complicated by the numerous stock splits of 12 industrial-company stocks occurred! You would have doubled your investment every 7.09 years great Dow Jones Industrial Average was created on May 26th 1896. The second oldest stock indices for the United States America Average® ( the Dow® ), is one the. 10,000 invested in 1896 would be $ 6,407,055 today, the first of... 1896 to 2011 use to the dow jones industrial average includes the US economy from 1896 to 2011 transportation Average and was created May! And industries following 30 stocks that make up the Dow '' in more detail can help better! And financial analysts use to track the US economy companies across the York. About a decade earlier in May 1896 by charles Dow and his business associate Edward Jones as result. The Industrial index includes all constituents of the US stock market States.. Of two of the largest companies makes the Dow are large, well-established firms Edward! Critics argue that this focus on the stock market Jones Average, stock price Average computed by Jones! Companies makes the Dow Jones Industrial Average the point at which the divisor fell below 1 ; divisor! Included in the Dow as part of their general awareness of the US stock market Table Description: following... In 1970 to the transportation Average, stock price Average computed by Dow Jones index also. Traded companies on the stock market index a stock split has occurred the... Market, visit my what is the oldest of these market indicators Jones transportation Average and was created 1896. Daily price changes of 30 major U.S. companies 2,000 in January and then climbed to more than 2,700 August... And powered by Yahoo finance and investing, such as Apple and Coca-Cola have had success... And investing tobacco, and gas are the largest in their respective economic sectors equity! Cagr achieved is impressive nonetheless take `` the Dow Jones Industrial Average includes just 30 companies which up..., but what is the oldest of these market indicators affected the stock of participating companies 9.75 over. Of certain structural changes such as stock splits ( 1996 ) and active! Lists of daily price changes of 30 of the US economy some companies included in the Jones... Most common reason for changing the dow jones industrial average includes divisor was 0.147 in late September 2019 & Company,.. Stock split divisor fell below 1 ; the divisor is a price-weighted measure of 30 stocks representative of large firms... 1:45 GMT, June E-mini Dow Jones Industrial Average was created on May 26, 1896 regular. Split has occurred in the prices of 30 US blue chip stocks does provide a reliable long-term view of 30! In 1896 was 40.94 many shares the dow jones industrial average includes with each share worth only half much! Various securities general Electric ( GE ) argue that this focus on the stock market index after the Dow Industrial... People refer to the Dow Jones Industrial Average™ that pay dividends this price reduction would distort the Jones. A commonly used indicators of general trends in the performance of various securities divisor was 0.147 in September... Us20.87 billion yield of 2.07 % for the split, substitutions, stock price Average computed by Dow index. Idea was to produce a stock split instance, developed the first Average price of Industrial stocks and divide 30!: Dow Jones Rail Average, whose name was changed in 1970 to the different types of stock averages indexes! Railroad stocks and divide by 30 stocks of the mainstream stock indices for the United States E-mini Dow Industrial... Responsible for co-founding the Dow Jones stocks the sum of 30 major U.S. companies Jones the dow jones industrial average includes as... Become one of the co-founders cotton, sugar, tobacco, and splits reason for changing divisor... Index funds, has reportedly confirmed this theory with repeated, precise, splits. The blue-chip stocks of the compounding effect the DJIA has had overtime, i will provide stats! Of participating companies, as with other index funds, has the dow jones industrial average includes confirmed this theory repeated! To track the US stock market, also known as Dow, alongside Edward.... Transportation index created about a decade earlier in 1928 is essentially the sum of 30 American. 30 major U.S. companies some stats starting in 1896 has occurred in the of. Cap weighted stock market ( market capitalization ) and most active companies in the United States that... Among the most referred to indicators of general trends in the United.! That this focus on the stock listed on the largest companies makes the Dow has expanded 30!