Its peaks and valleys shed light on the workings — and volatility — of the global economy. Critics also believe that factoring only the price of a stock in the calculation does not accurately reflect a company, as much as considering a company’s market cap would. Individuals can invest in the Dow, which would mean gaining exposure lmfx review to all of the companies listed in it, through exchange-traded funds (ETFs), such as the SPDR Dow Jones Industrial Average ETF (DIA). The DJIA launched in 1896 with just 12 companies, primarily in the industrial sector. Since then, it’s changed many times—the very first came three months after the 30-component index launched.
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This means that stocks in the index with higher share prices have greater influence, regardless if they are smaller companies overall in terms of market value. This also means that stock splits can have an impact on the index, whereas they would not for a market cap-weighted index. Interactive chart of the Dow Jones Industrial Average (DJIA) stock market index for the last 100 years. Historical data is inflation-adjusted using the headline CPI and each data point represents the month-end closing value. The current month is updated on an hourly basis with today’s latest value. The current price of the Dow Jones Industrial Average as of April 04, 2024 is 38,596.98.
- These actions artificially raised their earnings per share and the prices of their remaining outstanding stocks (stocks which are still held by shareholders).
- And it also shows that, despite a strong year-to-date return for the Dow, the index is still a fairly good price.
- Previously, the Dow had fallen from 11,723 in January 2000 to 9,389 in March 2001, dropping 20% (from 20,520 to 16,434 points, inflation-adjusted).
The most recent record closing occurred on Jan. 4, when the index closed at 36,799.65, blowing past the all-time high closing of 36,585.06 it had just a day before. The Dow’s history underscores the inevitable volatility of the stock market. But just because the stock market is volatile doesn’t mean you should shy away from investing in it. In fact, there are plenty of strategies for weathering coinspot review the stock market’s highs and lows, including prioritizing time in the market over timing the market prioritizing time in the market over timing the market. Titan helps you take advantage of both of these strategies by providing you with a diversified portfolio that enables healthy investing habits. Learn more about how to invest despite the market’s dips by downloading Titan’s app today.
How Often Does the Dow Jones Industrial Average Change?
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As the economy changes over time, so does the composition of the index. A component of the Dow may be dropped when a company becomes less relevant to current trends of the economy, to be replaced by a new name that better reflects the shift. For instance, a company may be removed from the index when its market capitalization drops because of financial distress. On that day, it closed at 7,286.27, a 37.8% decline from its peak. No one knew if a new bull market had begun until the Dow hit a higher low on March 11, 2003, closing at 7,524.06. The Dow started 2022 with a flourish, breaking closing records in the first two trading days of the year.
The Dow Jones is named after Charles Dow, who created the index in 1896 along with his business partner, Edward Jones. Also referred to as the Dow 30, the index is considered to be a gauge of the broader U.S. economy. One of the largest Dow exchange-traded funds (ETFs), the SPDR Dow Jones Industrial Average Trust (DIA 1.03%), has an average component price-to-earnings ratio of 22.1. That’s compared to 33.3 for the Invesco QQQ Trust (QQQ 1.53%), an ETF that mirrors the performance of the 100 largest Nasdaq stocks. By Jan. 20, it closed at 15,766.74, as investors panicked over plummeting oil prices, the devaluation of the yuan, and turmoil in China’s stock market.
Dow Jones Industrial Average (DJIA) Index Components
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The 2008 stock market crash was more dramatic than any other downturn in U.S. history. It took almost four years for the market to bottom out at that time. When the stock market crashed on October 19, 1987 — a date known colloquially as Black Monday — the Dow experienced its largest percentage drop in history, a whopping 22.6% decrease in a single day. For starters, the Dow Jones we know is not a person — but you already knew that. Named for its two founders, the Dow Jones is a stock market index, just like the S&P 500 or the Nasdaq.
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It then falls on March 7, 2000, rebounds to 11,124.83 on April 25, and falls again to 9,973.46 by March 14, 2001, beginning the 2001 recession. It then enters a period of volatility and drops to 8,920.70 after markets open following the September 11, 2001 terrorist attacks. The recession ends in November 2002 after a period of war-related uncertainty.
Slow-growing Dow companies like Procter & Gamble, McDonald’s, and Walmart aren’t going to wow you with their growth. But they will hold up extremely well during an economic downturn while supporting reliable dividend growth. The easiest way to invest in the Dow may be to buy shares in State Street Global Advisors’ SPDR Dow Jones Industrial Average ETF Trust, which trades under the ticker symbol DIA.