The Dow Jones Industrial Average (DJIA) has grown to become a key indicator of the overall health of the U.S. stock market and economy. it is one of the oldest and most significant stock market indices in the world. The Dow Jones Industrial Average (DJIA) represents the performance of 30 large, publicly-owned companies listed on stock exchanges in the United States.
The Purpose and Role of the DJIA
The DJIA tracks the price movements of its 30 component stocks. Unlike other indices that are weighted by market capitalization, the DJIA is a price-weighted index. This means companies with higher stock prices have a more significant impact on the index than those with lower prices. The DJIA serves as a barometer for the broader market, giving investors an indication of market trends.
A Brief History of the Dow Jones Industrial Average
The Early Days: 1896 to 1900
The DJIA was created in 1896 by Charles Dow and his business associate Edward Jones. Initially, the index consisted of 12 industrial companies, many of which represented industries like railroads and manufacturing, which were central to the U.S. economy at that time. The original companies included General Electric, American Tobacco, and U.S. Leather.
The index started with an initial value of 40.94 points, and it remained focused on industrial firms. Over the next few decades, the DJIA grew in importance as more companies were added, reflecting changes in the U.S. economy.
Evolution in the 20th Century
As the U.S. economy evolved, so did the DJIA. By the 1920s, the index expanded to include more companies from different sectors, including telecommunications, financial services, and technology. The 30-stock format was introduced in 1928, and the DJIA became the most-watched stock index in the U.S.
The stock market crash of 1929 and the subsequent Great Depression had a significant impact on the DJIA, with the index losing nearly 90% of its value from its peak. However, by the mid-20th century, the DJIA had fully recovered and continued to grow in importance.
Modern Era of the DJIA
In recent years, the DJIA has undergone several changes to reflect the shift from industrial production to technology and services in the U.S. economy. Companies like Apple, Microsoft, and Visa are now part of the DJIA, replacing traditional industrial firms.
The DJIA crossed the 1,000-point mark in 1972 and reached 10,000 points in 1999. It continued to set new records, crossing 30,000 points in 2020, driven by the growth of technology companies and a strong U.S. economy.
Companies Listed on the DJIA
The DJIA consists of 30 large-cap companies representing various sectors of the U.S. economy. Some of the notable companies currently listed in the DJIA include:
Dow Jones Industrial Average 30 Company Stocks
1. 3M Co
- NYSE Stock Ticker: MMM
- Sector/Industry: Producer Manufacturing/Industrial Conglomerates
- Company Information: 3M Co. is a diversified technology company serving customers and communities with innovative products and services.
- Company Address: 3M Center St. Paul Minnesota 55144-1000
- Phone Number: (651) 733-1110
- Website: www.3m.com
2. American Express Co
- NYSE Stock Ticker: AXP
- Sector/Industry: Finance/Financial Conglomerates
- Company Information: American Express Co. is a global payments and travel company.
- Company Address: American Express Co., World Financial Center, New York New York 10285-1000
- Phone Number: (212) 640-2000
- Website: www.americanexpress.com
3. AT&T; Inc
- NYSE Stock Ticker: T
- Sector/Industry: Communications / Major Telecommunications
- Company Information: AT&T;, Inc. provides telecommunication services and products, including wireless communications, local exchange services, long-distance services, data/broadband and Internet services, video services, telecommunications equipment, managed networking and wholesale services.
- Company Address: AT&T;, Inc.,208 South Akard Street, Dallas Texas 75202
- Phone Number: (210) 821-4105
- Website: www.att.com
4. Boeing Co
- NYSE Stock Ticker: BA
- Sector/Industry: Electronic Technology/Aerospace & Defense
- Company Information: The Boeing Co. is an aerospace company that manufactures commercial jetliners and defense, space and security systems.
- Company Address: The Boeing Co., 100 North Riverside Plaza, Chicago Illinois 60606-1596
- Phone Number: (312) 544-2000
- Website: www.boeing.com
5. Caterpillar Inc
- NYSE Stock Ticker: CAT
- Sector/Industry: Producer Manufacturing/Trucks,Construction,Farm Machinery
- Company Information: Caterpillar, Inc. is engaged in the manufacturing of construction & mining equipment, diesel & natural gas engines, industrial gas turbines and diesel-electric locomotives.
- Company Address: Caterpillar, Inc.,100 Northeast Adams Street, Peoria Illinois 61629-5310
- Phone Number: (309) 675-1000
- Website: www.Caterpillar.com
6. Chevron Corp
- NYSE Stock Ticker: CVX
- Sector/Industry: Energy Minerals/Intergrated Oil
- Company Information: Chevron Corp. is an integrated energy company.
- Company Address: Chevron Corp.,6001 Bollinger Canyon Road, San Ramon California 94583-2324
- Phone Number: (925) 842-1000
- Website: www.chevron.com
7. E I du Pont de Nemours and Co
- NYSE Stock Ticker: DD
- Sector/Industry: Process Industries/Chemicals: Major Diversified
- Company Information: E.I. du Pont de Nemours & Co. science-based products and services company. It operates through eight segments include; Agriculture, Electronics & Communications, Industrial Biosciences, Nutrition & Health, Performance Chemicals, Performance Materials, Safety & Protection and Pharmaceuticals.
- Company Address: E.I. du Pont de Nemours & Co., 1007 Market Street, Wilmington Delaware 19898
- Phone Number: (302) 774-1000
- Website: www.dupont.com
8. General Electric Co
- NYSE Stock Ticker: GE
- Sector/Industry: Producer Manufacturing/Industrial Conglomerates
- Company Information: General Electric Co. is a technology and financial services company that develops and manufactures products for the generation, transmission, distribution, control and utilization of electricity.
- Company Address: General Electric Co., 3135 Easton Turnpike, Fairfield Connecticut 06828
- Phone Number: (203) 373-2211
- Website: www.ge.com
9. Exxon Mobil Corp
- NYSE Stock Ticker: XOM
- Sector/Industry: Energy Minerals/Integrated Oil
- Company Information: Exxon Mobil Corp. explores, develops and distributes crude oil and natural gas.
- Company Address: Exxon Mobil Corp., 5959 Las Colinas Boulevard, Irving Texas 75039-2298
- Phone Number: (972) 444-1000
- Website: www.exxonmobil.com
10. Cisco Systems Inc
- NASDAQ Stock Ticker: CSCO
- Sector/Industry: Electronic Technology/Computer Communications
- Company Information: Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol-based networking and other products related to the communications and information technology industry and provides services associated with these products.
- Company Address: Cisco Systems, Inc., 170 West Tasman Drive,San Jose California 95134-1706
- Phone Number: (408) 526-4000
- Website: www.cisco.com
11. Goldman Sachs Group Inc
- NYSE Stock Ticker: GS
- Sector/Industry: Finance/nvestment Banks,Brokers
- Company Information: The Goldman Sachs Group, Inc. is global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals.
- Company Address: The Goldman Sachs Group, Inc.,200 West Street, New York New York 10282
- Phone Number: (212) 902-1000
- Website: www.goldmansachs.com
12. Home Depot Inc
- NYSE Stock Ticker: HD
- Sector/Industry: Retail Trade/Home Improvement Chains
- Company Information: Home Depot, Inc. is a home improvement retailer that sells building materials and home improvement products.
- Company Address: The Home Depot, Inc., 2455 Paces Ferry Road NW, Atlanta Georgia 30339-4024
- Phone Number: (770) 433-8211
- Website: www.homedepot.com
13. International Business Machines Corp
- NYSE Stock Ticker: IBM
- Sector/Industry: Technology Services/Information Technology Services
- Company Information: International Business Machines Corp. is an information technology company, which provides integrated solutions that leverage information technology and knowledge of business processes.
- Company Address: International Business Machines Corp., 1 New Orchard Road, Armonk New York 10504-1722
- Phone Number: (914) 499-1900
- Website: www.ibm.com
14. Johnson & Johnson
- NYSE Stock Ticker: JNJ
- Sector/Industry: Health Technology/Pharmaceuticals
- Company Information: Johnson & Johnson operates as an investment holding company with interests in health care products.
- Company Address: Johnson & Johnson, One Johnson & Johnson Plaza, New Brunswick New Jersey 08933
- Phone Number: (732) 524-0400
- Website: www.jnj.com
15. Intel Corp
- NASDAQ Stock Ticker: INTC
- Sector/Industry: Electronic Technology/Semiconductors
- Company Information: Intel Corp. designs, manufactures and sells computer components and related products.
- Company Address: Intel Corp.,2200 Mission College Boulevard, Santa Clara California 95054-1549
- Phone Number: (408) 765-8080
- Website: www.intel.com
16. PMorgan Chase and Co
- Stock Ticker: JPM
- Sector/Industry: Finance / Financial Conglomerates
- Company Information: JPMorgan Chase & Co. is a financial holding company that provides financial and investment banking services.
- Company Address: JPMorgan Chase & Co. 270 Park Avenue, New York New York 10017-2
- Phone Number: (212) 270-6000
- Website: www.jpmorganchase.com
17. McDonald’s Corp
- NYSE Stock Ticker: MCD
- Sector/Industry: Consumer Services/Restaurants
- Company Information: McDonald’s Corp. operates and franchises McDonald’s restaurants in the global restaurant industry. The company manages its business as distinct geographic segments.
- Company Address: McDonald’s Corp. One McDonald’s Plaza, Oak Brook Illinois 60523-5500
- Phone Number: (630) 623-3000
- Website: www.mcdonalds.com
18. Merck & Co Inc
- NYSE Stock Ticker: MRK
- Sector/Industry: Health Technology/Major Pharmaceuticals
- Company Information: Merck & Co., Inc. provides various health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products worldwide.
- Company Address: Merck & Co., Inc., One Merck Drive, Whitehouse Station New Jersey 08889-3400
- Phone Number: (908) 423-1000
- Website: www.merck.com
19. Microsoft Corp
- NASDAQ Stock Ticker: MSFT
- Sector/Industry: Technology Services/Packaged Software
- Company Information: Microsoft Corp. develops and markets software, services and hardware that deliver new opportunities, greater convenience and enhanced value to people’s lives.
- Company Address: Microsoft Corp., One Microsoft Way, Redmond Washington 98052-6399
- Phone Number:(425) 882-8080
- Website: www.microsoft.com
20. Nike Inc
- NYSE Stock Ticker: NKE
- Sector/Industry: Consumer Non-Durables/Apparel,Footwear
- Company Information: NIKE, Inc. designs, develops, markets and sells high quality footwear, apparel, and equipment, accessories and services.
- Company Address: NIKE, Inc., One Bowerman Drive, Beaverton Oregon 97005-6453
- Phone Number: (503) 671-6453
- Website: www.nikeinc.com
21. Pfizer Inc
- NYSE Stock Ticker: PFE
- Sector/Industry: Health Technology/Major Pharmaceuticals
- Company Information: Pfizer, Inc. is a research-based, global biopharmaceutical company. The company’s global portfolio includes medicines and vaccines, as well as many of the world’s best-known consumer healthcare products.
- Company Address: Pfizer Inc., 235 East 42nd Street, New York New York 10017-5755
- Phone Number: (212) 733-2323
- Website: www.pfizer.com
22. Procter & Gamble Co
- NYSE Stock Ticker: PG
- Sector/Industry: Consumer Non-Durables/Household,Personal Care
- Company Information: Procter & Gamble Co. provides branded consumer packaged goods to its consumers around the world. Its products are sold primarily through mass merchandisers, grocery stores, membership club stores, drug stores, high frequency stores, and neighborhood stores which serve many consumers in developing markets.
- Company Address: Procter & Gamble Co., One Procter & Gamble Plaza, Cincinnati Ohio 45202-3315
- Phone Number: (513) 983-1100
- Website: www.pg.com
23. The Coca-Cola Co
- NYSE Stock Ticker: KO
- Sector/Industry: Consumer Non-Durables/Non-Alcoholic Beverages
- Company Information: The Coca-Cola Co. is a beverage company, which provides diet and regular sparkling beverages and still beverages.
- Company Address: The Coca-Cola Co., One Coca-Cola Plaza, Atlanta Georgia 30313-2420
- Phone Number: (404) 676-2121
- Website: www.coca-colacompany.com
24. Travelers Companies Inc
- NYSE Stock Ticker: TRV
- Sector/Industry: Finance/Property, Casualty Insurance
- Company Information: The Travelers Cos., Inc. is a holding company engaged through its subsidiaries in providing a wide range of commercial and personal property and casualty insurance products and services to businesses, government units, associations and individuals.
- Company Address: The Travelers Cos., Inc., 485 Lexington Avenue, New York New York 10017-2630
- Phone Number: (917) 778-6000
- Website: www.travelers.com
25. UnitedHealth Group Inc
- NYSE Stock Ticker: UNH
- Sector/Industry: Health Services/Managed Health Care
- Company Information: UnitedHealth Group, Inc. provides health care coverage, software and data consultancy services.
- Company Address: UnitedHealth Group, Inc., UnitedHealth Group Center, Minneapolis Minnesota 55343
- Phone Number: (952) 936-1300
- Website: www.unitedhealthgroup.com
26. Verizon Communications Inc
- NYSE Stock Ticker: VZ
- Sector/Industry: Communications/Major Telecommunications
- Company Information: Verizon Communications Inc. operates as a holding company, which provides broadband and other wireless and wireline communications services to consumer, business, and government and wholesale customers.
- Company Address: Verizon Communications, Inc., 140 West Street, New York New York 10007
- Phone Number: (212) 395-1000
- Website: www.verizon.com
27. Visa Inc
- NYSE Stock Ticker: V
- Sector/Industry: Finance/Finance,Rental,Leasing
- Company Information: Visa, Inc. is a global payments technology company that connects consumers, businesses, banks, governments and territories to fast, secure and reliable electronic payments.
- Company Address: Visa, Inc., 900 Metro Center Boulevard, Foster City California 94404-2172
- Phone Number: (415) 932-2100
- Website: www.corporate.visa.com
28. United Technologies Corp
- NYSE Stock Ticker: UTX
- Sector/Industry: Producer Manufacturing/Industrial Conglomerates
- Company Information: United Technologies Corp. provides products and services to the building systems and aerospace industries worldwide.
- Company Address: United Technologies Corp., United Technologies Bldg. 25/F, Hartford Connecticut 06103
- Phone Number: (860) 728-7000
- Website: www.utc.com
29. Wal-Mart Stores Inc
- NYSE Stock Ticker: WMT
- Sector/Industry: Retail Trade/Discount Stores
- Company Information: Wal-Mart Stores, Inc. operates retail stores in various formats around the world.
- Company Address: Wal-Mart Stores, Inc., 702 Southwest 8th Street, Bentonville Arkansas 72716-8611
- Phone Number: (479) 273-4000
- Website: www.walmartstores.com
30. Walt Disney Co
- NYSE Stock Ticker: DIS
- Sector/Industry: Consumer Services/Media Conglomerates
- Company Information: The Walt Disney Co. together with its subsidiaries and affiliates is a diversified international family entertainment and media enterprise.
- Company Address: The Walt Disney Co., 500 South Buena Vista Street, Burbank California 91521-6205
- Phone Number:(818) 560-1000
- Website: www.thewaltdisneycompany.com
Important Details About the DJIA
How the DJIA is Calculated
The DJIA is unique in that it is a price-weighted index. This means that companies with higher stock prices have a larger influence on the index’s overall movement. The value of the DJIA is calculated by summing the prices of its 30 component stocks and dividing that number by a factor known as the Dow Divisor. This divisor is periodically adjusted to account for stock splits, dividends, or changes in the list of components, ensuring that the index remains a reliable indicator of stock market performance.
Why the DJIA is Important
The DJIA is a widely recognized benchmark for the U.S. stock market, often used by investors and analysts to gauge the performance of the stock market and the economy. While the DJIA represents only 30 companies, these firms are considered leaders in their respective industries, making the index a good reflection of the broader market trends.
Criticisms of the DJIA
While the DJIA is one of the most popular indices, it is not without its critics. One criticism is its price-weighted nature, where companies with higher stock prices have a disproportionate impact on the index. This can cause the DJIA to be more volatile than other indices like the S&P 500, which is weighted by market capitalization.
In addition, with only 30 companies included in the index, some argue that the DJIA does not provide a comprehensive view of the U.S. stock market. Other indices, such as the Russell 2000 or the Nasdaq Composite, offer broader representations of the market.
Key Milestones in the DJIA’s History
Major Market Events
Over its long history, the DJIA has been a witness to several key events in global finance and the U.S. economy. Some of the most notable events include:
The Stock Market Crash of 1929
The Great Depression began with the stock market crash of 1929, which saw the DJIA plummet from a peak of 381 points to a low of 41 points by 1932. It took decades for the index to recover fully, and this period remains one of the most studied in financial history.
Black Monday in 1987
On October 19, 1987, known as Black Monday, the DJIA experienced its largest single-day percentage drop in history, losing 22.6% of its value in one day. This event had widespread repercussions on global markets.
The Dot-com Bubble
The dot-com bubble of the late 1990s and early 2000s saw the DJIA rise rapidly as technology stocks boomed. However, the bubble burst in 2000, leading to significant declines in the index as tech companies lost value.
The 2008 Financial Crisis
The 2008 financial crisis saw the DJIA fall dramatically as the housing market collapsed, banks failed, and the U.S. economy entered a recession. The DJIA dropped from a high of over 14,000 points in 2007 to below 7,000 points in 2009.
The COVID-19 Pandemic
In early 2020, the DJIA experienced a sharp decline due to the COVID-19 pandemic. However, the index rebounded quickly, driven by growth in technology stocks and large government stimulus efforts. By late 2020, the DJIA crossed the 30,000-point mark for the first time in history.
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Money Quotes and Saying for the Day:
October. This is one of the peculiarly dangerous months to speculate in stocks in. The others are July, January, September, April, November, May, March, June, December, August, and February.- Mark Twain