Dow Jones Industrial Average: A Comprehensive Guide
What is the Dow Jones Industrial Average?
The Dow Jones Industrial Average (DJIA) is a stock market index that tracks the performance of 30 large, publicly traded companies listed on the New York Stock Exchange (NYSE) and the Nasdaq Stock Market. It is one of the oldest and most widely followed stock market indices in the world.
Historical Performance
The DJIA was created by Charles Dow and Edward Jones in 1896 and initially included 12 companies. Over the years, the number of companies in the index has been expanded to 30. The DJIA has experienced significant growth over its history, with periods of both expansion and contraction. Significant milestones in the DJIA's history include: * 1930: The DJIA reaches its highest level during the Roaring Twenties, before crashing in the Great Depression. * 1987: The DJIA experiences its largest one-day drop of 22.6% during the Black Monday crash. * 2008: The DJIA falls below 7,000 points during the financial crisis. * 2020: The DJIA rebounds to reach its highest level ever, above 30,000 points.
Constituents
The companies that make up the Dow Jones Industrial Average vary over time. Currently, the index includes well-known names such as: * Apple * Goldman Sachs * IBM * Johnson & Johnson * Nike * UnitedHealth Group
Significance
The DJIA is a widely used indicator of the overall health of the U.S. stock market. It is frequently reported in financial news and used by investors to make investment decisions. The DJIA's performance can influence the sentiment of investors and impact the value of other stock markets around the world.
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