This preview shows page 1. Sign up to view the full content.
Unformatted text preview: You may have heard news commentators say, “The Dow fell 302 points on heavy
trading.” They are talking about the Dow
Jones Industrial Average. The Dow Jones
Industrial Average (DJIA) first appeared
on the scene more than 100 years ago, on The interior and
exterior of the New
York Stock Exchange.
Stocks of close to
valued at nearly $20
trillion, are traded on
the exchange. Dow Jones Industrial
The most popular,
widely cited indicator of
day-to-day stock market
activity. The DJIA is a
weighted average of 30
widely traded stocks on
the New York Stock
Exchange. Section 1 Stocks 431 16 (428-459) EMC Chap 16 EXHIBIT 16-1 11/18/05 9:33 AM Page 432 The
The 30 Stocks of the Dow Jones
Average 3M Company Intel Corporation Alcoa Incorporated International Business Machines Altria Group, Inc. Corporation American Express J. P. Morgan Chase and Company American International Group, Inc. Johnson & Johnson Boeing Company McDonald’s Corporation Caterpillar Incorporated Merck & Company, Inc. Citigroup Incorporated Microsoft Corporation Coca-Cola Company Pfizer Incorporated DuPont Procter & Gamble Company Exxon Mobil Corporation SBC Communications Incorporated General Electric Company United Technologies Corporation General Motors Corporation Verizon Communications, Inc. Hewlett-Packard Company Wal-Mart Stores Incorporated Home Depot Incorporated Walt Disney Company Honeywell International, Inc. Why did Charles Dow create the Dow Jones Industrial
Average? What purpose does it serve today? May 26, 1896. It was devised by Charles H.
Dow. Dow took 11 stocks, summed their
prices on a particular day, and then divided
by 11. The “average price” was the DJIA.
(Some of the original companies included
American Cotton Oil, Chicago Gas,
National Lead, and U.S. Rubber.)
When Charles Dow first computed the
DJIA, the stock market was not highly
regarded in the United States. Prudent
investors bought bonds, not stocks. Stocks
were thought to be the area in which...
View Full Document
- Winter '14