Economics and Business

New York Stock Exchange

What is the history of the Dow Jones Industrial Average?

A measure of stock prices of important industrial companies, the Dow Jones Industrial Average (DJIA) was first printed in the Wall Street Journal in 1897. The average is an indicator of the market overall and is used, along with other indexes, by investors, stockbrokers, and analysts to make investment forecasts and decisions. “The Dow,” as it has come to be called, was conceived of as a summary measure of the stock market, an index that could be used to analyze past trends, indicate current trends, and even predict future ones. The first DJIA averaged the prices of 12 major companies. The list had been expanded since: in 1916 it averaged the stock prices of 20 companies; in 1928, 30. Adjustments have been made as the result of company mergers and dissolutions. Though it is a measure only of the New York Stock Exchange, the Dow Jones Average has been called a barometer of the stock market. News of fluctuations in the DJIA can affect market prices around the world.


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