The Dow Jones Industrial Average
The most often-quoted stock market indicator is the Dow Jones Industrial Average (DJIA). In 1896, Charles Dow averaged closing prices of 12 representative stocks and the DJIA was christened. Since then it has been expanded to include 30 familiar blue chip companies to be more representative of the country’s largest companies.
The calculation is also changed to reflect stock splits. While this index is not reflective of the entire stock market, watching changes in the DJIA can help you stay abreast of current conditions.
Original Dow Stocks
| American Cotton Oil | Laclede Gas |
| American Sugar | National Lead |
| American Tobacco | North American |
| Chicago Gas | Tennessee Coal & Iron |
| Distilling & Cattle Feeding | U.S. Leather preferred |
| General Electric | U.S. Rubber |
Current DJIA Stocks
| 3M Company | Intel Corporation |
| Alcoa Incorporated | International Business Machines |
| American Express Company | J.P Morgan Chase & Company |
| AT&T Incorporated | Johnson & Johnson |
| Bank of America Corporation | Kraft Foods |
| Boeing Company | McDonald's Corporation |
| Caterpillar Incorporated | Merck & Company, Incorporated |
| Chevron Corporation | Microsoft Corporation |
| Cisco Systems, Inc. | Pfizer Incorporated |
| Coca-Cola Company | Proctor & Gamble Company |
| DuPont | Travelers Companies, Inc. |
| Exxon Mobil Corporation | United Technologies Corporation |
| General Electric Company | Verizon Communications Inc. |
| Hewlett-Packard Company | Wal-Mart Stores Incorporated |
| Home Depot Incorporated | Walt Disney Company |
In February, 2008, Bank of America Corporation and Chevron Corporation replaced Altria Group Incorporated and Honeywell International, Incorporated. In September 2008, Kraft Foods replaced American International Group. In June, 2009, Travelers Companies, Inc. replaced Citigroup Incorporated and Cisco Systems, Inc. replaced General Motors Corporation.
The DJIA is the most well-known stock market indicator. However, the S&P 500 and NASDAQ indexes include a broader selection of stocks including smaller companies.
This content has been provided by Practical Money Skills and is intended to serve as a general guideline.
