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The Dow Jones Industrial Average Index

The Dow Jones Industrial Average Index. Brief History. Founders Edward Davis Charles Henry Charles Milford Jones Dow Bergstresser. Brief History. First DJIA released on May 26, 1896 Stock market was not highly regarded Prudent investors bought bonds

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The Dow Jones Industrial Average Index

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  1. The Dow Jones Industrial Average Index

  2. Brief History Founders Edward DavisCharles Henry Charles Milford Jones Dow Bergstresser

  3. Brief History • First DJIA released on May 26, 1896 • Stock market was not highly regarded • Prudent investors bought bonds The Index brought about a great change in the way people regarded the stock market.

  4. Brief History • Index designed for everyday people to be able to discern stock trends Like placing sticks in the beach sand wave after wave To determine whether the tide is coming in or going out Higher peaks and higher lows = Bull market Lower peaks and lower lows = Bear market

  5. Brief History • Daily publication in The Wall Street Journal began on Oct. 7, 1896 • Now, the DJIA consists of 30 stocks accounting for approximately 23.8% of the total U.S.

  6. Company Structure Dow Jones & Company is a subsidiary of News Corporation • 7,000+ full-time employees • Composed of 4 segments

  7. Company’s Four segments • Consumer Media Group: The Wall Street Journal, Barron's, MarketWatch and the Far Eastern Economic Review. • Enterprise Media Group: Dow Jones Indexes, Dow Jones Financial Information services. • Local Media Group: coast-to-coast group which publishes eight daily and 14 weekly community newspapers. • Strategic Alliances: Smart Money, Vedomosti, Stoxx

  8. Why is the DJIA so reliable? • A stock is added only if it has an excellent reputation, demonstrates sustained growth, is of interest to a large number of investors and accurately represents the sector(s) covered by the average • Maintained and reviewed by editors of The Wall Street Journal • Most quoted market indicator in newspapers, on TV and on the Internet • Discernable by most people • Reliably indicates the market's basic trend

  9. Index Computation • Average stock price of the 30 companies in the index

  10. Index Computation Major problem: Splits Stock trading at $100 has a 2-for-1 split - # number of its shares doubles - Price of each share becomes $50 Brings down the average even though there is no fundamental change in the stock

  11. Index Computation Solution Prices of the 30 stocks that make up the index are added Then divided by the Dow divisor, which is constantly modified

  12. Where to find it? .DJI

  13. Where to find DJIA Quotes .DJI

  14. Times Square New York, NY

  15. Quiz Name 2 of the 3 founders of the DJIA

  16. Founders Edward DavisCharles Henry Charles Milford Jones Dow Bergstresser

  17. Quiz What does the DJIA indicate?

  18. DJIA Indicates

  19. Quiz Who publishes the index?

  20. Published by

  21. Quiz 1.How many companies are represented by the index? 2. Can anyone name 3 of these companies?

  22. 30 Companies MMM 3M Co. HD Home Depot Inc. AA Alcoa Inc. HON Honeywell International MO Altria Group Inc. INTC Intel Corp. AXP American Express Co. JNJ Johnson & Johnson T AT&T Inc. JPM JPMorgan Chase & Co. BA Boeing Co. MCD McDonald's Corp. CAT Caterpillar Inc. MRK Merck & Co. Inc. C Citigroup Inc. MSFT Microsoft Corp. KO Coca-Cola Co. PFE Pfizer Inc. DD E.I. DuPont de Nemours PG Procter & Gamble Co. XOM Exxon Mobil Corp. UTX United Technologies Corp. GE General Electric Co. VZ Verizon Communications GM General Motors Corp. WMT Wal-Mart Stores Inc. HPQ Hewlett-Packard Co. DIS Walt Disney Co. IBM International Business Machines Corp AIG American International Group Inc.

  23. Quiz What is the 3 letter ticker of the index? Name 3 different places where you can get a quote.

  24. DJIA Quotes .DJI

  25. QUIZ What was the .DJI quote at market close today? Are we in a bull or bear market?

  26. Market pulse Recession = evil = BEAR Market is in a downtrend

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