What is the Dow Jones Industrial Average (DJIA)?

The Dow Jones Industrial Average

The most often quoted stock market indicator is the Dow Jones Industrial Average (DJIA). In 1884, 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	J.P. Morgan Chase & Company
American Express	Johnson & Johnson
AT&T Incorporated	McDonald's Corporation
Boeing Company	Merck & Company, Incorporated
Caterpillar Incorporated	Microsoft Corporation
Chevron Corporation	Nike
Cisco Systems, Inc.	Pfizer Incorporated
Coca-Cola Company	Proctor & Gamble Company
DuPont	Travelers Companies, Inc.
Exxon Mobil Corporation	UnitedHealth Group
General Electric Company	United Technologies Corporation
Goldman Sachs	Verizon Communications Inc.
Home Depot Incorporated	Visa
Intel	Wal-Mart Stores Incorporated
International Business Machines	Walt Disney Company

In September, 2012, UnitedHealth Group replaced Kraft Foods. In September, 2013, Goldman Sachs, Nike and Visa replaced Alcoa, Bank of America and Hewlett Packard.

The DJIA is the most well known stock market indicator. However, the S+P500 and NASDAQ indexes include a broader selection of stocks including smaller companies.

This information has been provided by Financial Wisdom Marketing Services, Inc. and is for educational purposes only. Content from Financial Wisdom and/or Redwood Credit Union is not, in any way, intended to provide legal, tax, or financial advice.