Why Is the Dow Jones Industrial Average Important?
The Dow Jones Industrial Average is a stock market index. It tracks the changes in value of 30 select stocks. History The Dow Jones Industrial Average, referred to as DJIA, the Dow or the Dow Jones, is the oldest index tracking the U.S. stock market. It was started by Charles Dow in 1896 and originally tracked 12 stocks. Function Today the Dow consists of 30 stocks selected by the Dow Jones Company. The Dow 30 stocks are considered to be the top companies in America. Contrary to the index’ name, not all of the Dow 30 are industrial companies. Representative companies include Catepillar, IBM, Coca Cola, Wal-Mart and JP Morgan Chase. Significance The DJIA is the most widely followed stock market indicator in the financial, mainstream and international news sources. Much broader measures of stock market activity exist, including the S&P 500 index, which monitors the stock prices of the top 500 U.S. corporations, and the Wilshire 5000, which monitors the stocks of all U.S. companies with m
