what exactly is the Dow?

im writing a paper on the dow jones industrial average...

4 Answers

  • 1 decade ago
    Favorite Answer

    The Dow Jones Industrial Average, the most acknowledged stock market index in the world, is a collection of thirty of the most lucrative industrial stocks on the current market that each represent an industry. The "Dow" or (DJIA) is also perceived to be a way of showing how the American economy is doing as a whole. When someone hears the “Dow is up,” they assume the American economy overall is doing well.

    On May 26, 1896 the Dow Industrial Average was first published by its founder Charles Dow. The first Index was composed of twelve liquid and highly capitalized stocks, most railways listed on the NYSE. In 1916 the Dow grew to twenty stocks and most recently grew again to thirty stocks in 1928. Eighty years later the number of stocks is still thirty and companies such as General Electric who was one of the original twelve are still on the index today.

    The Dow Jones Industrial Average is a small collection of powerful stocks that paints an important picture of the American economy, which a majority of the world depends on daily. A list of companies on the Dow Jones Industrial Average in its entirety is as follows:

    3M, Alcoa, Altria Group, American Express, American International Group, AT&T, Boeing, Caterpillar, Citigroup, Coca Cola, Dupont, Exxon Mobil, General Electric, General Motors, Home Depot, Honeywell, Intel, IBM, Johnson & Johnson, JP Morgan Chase, McDonald's, Merck, Microsoft, Pfizer, Proctor & Gamble, United Technologies Corporation, Verizon Communications, Wal-Mart, and Walt Disney.

  • 1 decade ago

    Although the first answer is good information on the Dow, be careful to give it too much credibility. When the Dow first came out it did give you a good barometer for how the market and the economy were doing. But since our economy and the number of listed stocks has grown, it's not the best indicator in my opinion. In addition, the Dow is a price weighted index. This means that stocks with a higher price have more impact on how much the index moves. A much better index to follow if you are looking to gage the economy would be the S&P 500 or the Wilshire 5000. These are also market-cap weighted indexes which means the larger the company, the larger impact it has on the movement of the index.

  • 1 decade ago

    Listen to the guy above. One more ineresting point is that the S&P 500 gained more popularity than the Dow (as far as market indices go because those that own the Dow did not wish to license out its use for a long time.

  • 1 decade ago

    Here's a link that tells all about it...


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