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Wed May 26, 2021, 09:48 AM

On this day, May 26, 1896, the Dow Jones Industrial Average was first calculated.

Hat tip, The Wall Street Journal.

Here’s what we’re watching ahead of Wednesday’s opening bell

For 125 years, the Dow Jones Industrial Average has evolved alongside the U.S. economy, from smokestack companies to a diverse array that includes tech heavyweights

Dow Jones Industrial Average

Historical logarithmic graph of the DJIA from 1896 to 2011

Foundation: February 16, 1885; 136 years ago (as DJA)
May 26, 1896 (as DJIA)
Website: us.spindices.com/indices/equity/dow-jones-industrial-average

The Dow Jones Industrial Average (DJIA), Dow Jones, or simply the Dow (/ˈdaʊ/), is a stock market index that measures the stock performance of 30 large companies listed on stock exchanges in the United States.

Although the DJIA is one of the oldest and the most commonly followed equity indices, many professionals consider the Dow to be an inadequate representation of the overall U.S. stock market compared to broader market indices such as the S&P 500 Index or Russell 3000. The DJIA includes only 30 large companies due to the lower number of American stocks during the index's creation in the late 1800s, and due to the era's data limitations the DJIA is weighted by stock price unlike later stock indices which use company value. Furthermore, the DJIA does not use a weighted arithmetic mean.

The value of the index is the sum of the stock prices of the companies included in the index, divided by a factor which is currently (as of September 2020) approximately 0.152. The factor is changed whenever a constituent company undergoes a stock split so that the value of the index is unaffected by the stock split.

First calculated on May 26, 1896, the index is the second-oldest among the U.S. market indices (after the Dow Jones Transportation Average). It was created by Charles Dow, the editor of The Wall Street Journal and the co-founder of Dow Jones & Company, and named after him and his business associate, statistician Edward Jones. The word industrial in the name of the index initially emphasized the heavy industry sector, but over time stocks from many other types of companies have been added to the DJIA.


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Reply On this day, May 26, 1896, the Dow Jones Industrial Average was first calculated. (Original post)
mahatmakanejeeves May 26 OP
bucolic_frolic May 28 #1

Response to mahatmakanejeeves (Original post)

Fri May 28, 2021, 07:46 AM

1. Which kind of argues heavily for long term perspective

not to mention more newly industrialized and capitalistic regions such as China and its new Silk Road.

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