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Dow Jones Industrial Average: A Comprehensive Overview
What is the Dow Jones Industrial Average?
The Dow Jones Industrial Average (DJIA) is a stock market index that tracks the performance of 30 of the largest publicly traded companies in the United States. It is one of the most widely followed stock market indices in the world and is often used as a barometer of the overall health of the U.S. economy.
History of the Dow Jones Industrial Average
The Dow Jones Industrial Average was created by Charles Dow and Edward Jones in 1896. The initial index consisted of 12 companies, including General Electric, U.S. Steel, and American Tobacco. Over the years, the index has been expanded to include 30 companies, which are selected by a committee of editors from The Wall Street Journal.
Components of the Dow Jones Industrial Average
The 30 companies that make up the Dow Jones Industrial Average are:
- 3M
- American Express
- Apple
- Boeing
- Caterpillar
- Chevron
- Cisco Systems
- Coca-Cola
- DowDuPont
- ExxonMobil
- General Electric
- Goldman Sachs
- Home Depot
- IBM
- Intel
- Johnson & Johnson
- JPMorgan Chase
- McDonald's
- Merck
- Microsoft
- Nike
- Pfizer
- Procter & Gamble
- Salesforce
- Travelers Companies
- UnitedHealth Group
- Verizon
- Visa
- Walmart
- Walt Disney
How is the Dow Jones Industrial Average Calculated?
The Dow Jones Industrial Average is calculated by summing the share prices of the 30 component companies and dividing by the Dow Divisor. The Dow Divisor is a number that is constantly adjusted to ensure that the index reflects the changing market capitalization of the component companies.
Importance of the Dow Jones Industrial Average
The Dow Jones Industrial Average is one of the most widely followed stock market indices in the world. It is often used as a barometer of the overall health of the U.S. economy. The index is also used by investors to make investment decisions.
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