The Dow Jones Industrial Average ( /ˌdaʊ ˈdʒoʊnz/), also called the Industrial Average, the Dow Jones, the Dow 30, or simply the Dow, is a stock market index, and one of several indices created by Wall Street Journal editor and Dow Jones & Company co-founder Charles Dow. It was founded on May 26, 1896, and is now owned by Dow Jones Indexes, which has its majority owned by the CME Group. The average is named after Dow and one of his business associates, statistician Edward Jones. It is an index that shows how 30 large publicly owned companies based in the United States have traded during a standard trading session in the stock market. It is the second oldest U.S. market index after the Dow Jones Transportation Average, which was also created by Dow.
The Industrial portion of the name is largely historical, as many of the modern 30 components have little or nothing to do with traditional heavy industry. The average is price-weighted, and to compensate for the effects of stock splits and other adjustments, it is currently a scaled average. The value of the Dow is not the actual average of the prices of its component stocks, but rather the sum of the component prices divided by a divisor, which changes whenever one of the component stocks has a stock split or stock dividend, so as to generate a consistent value for the index.
Along with the NASDAQ Composite, the S&P 500 Index, and the Russell 2000 Index, the Dow is among the most closely watched U.S. benchmark indices tracking targeted stock market activity. Although Dow compiled the index to gauge the performance of the industrial sector within the American economy, the index's performance continues to be influenced by not only corporate and economic reports, but also by domestic and foreign political events such as war and terrorism, as well as by natural disasters that could potentially lead to economic harm. Components of the Dow trade on both the NASDAQ OMX and the NYSE Euronext, two of the largest stock market companies. Derivatives of the Dow trade on the Chicago Board Options Exchange and through the CME Group, the world's largest futures exchange company, which owns 90% of the indexing business founded by Dow Jones, including the Industrial Average.
Read more about Dow Jones Industrial Average: Components, Former Components, Investing, Calculation, Assessment, Correlations Among Stocks Forming The Dow Jones Industrial Average
Famous quotes containing the words dow, jones, industrial and/or average:
“The woman was old and ragged and gray
And bent with the chill of the Winter’s day.”
—Mary Dow Brine (1816–1913)
“Come all you rounders if you want to hear
A story ‘bout a brave engineer;
Casey Jones, that was the rounder’s name
On a heavy eight-wheeler he rode to fame.”
—Unknown. Casey Jones (l. 1–4)
“Dead power is everywhere among us—in the forest, chopping down the songs; at night in the industrial landscape, wasting and stiffening the new life; in the streets of the city, throwing away the day. We wanted something different for our people: not to find ourselves an old, reactionary republic, full of ghost-fears, the fears of death and the fears of birth. We want something else.”
—Muriel Rukeyser (1913–1980)
“In the middle classes the gifted son of a family is always the poorest—usually a writer or artist with no sense for speculation—and in a family of peasants, where the average comfort is just over penury, the gifted son sinks also, and is soon a tramp on the roadside.”
—J.M. (John Millington)