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.