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+ "page_name": "What Is the Dow Jones Industrial Average Stock Market Index? | ...",
+ "page_url": "https://www.fool.com/investing/stock-market/indexes/dow-jones/",
+ "page_snippet": "One of the oldest stock indexes, the Dow Jones tracks 30 of the largest U.S. companies. Create long-term wealth by learning to use the Dow.The Dow Jones Industrial Average (DJINDICES:^DJI) is a stock index that tracks 30 of the largest U.S. companies. Created in 1896, it is one of the oldest stock indexes, and its performance is widely considered to be a useful indicator of the health of the entire U.S. stock market. The Dow Jones Industrial Average index is managed by S&P Dow Jones Indices, a joint venture majority-controlled by the financial information and analytics company S&P Global (SPGI 0.15%). The Dow Jones Industrial Average index is managed by S&P Dow Jones Indices, a joint venture majority-controlled by the financial information and analytics company S&P Global (SPGI 0.15%). The Dow Jones Industrial Average does not include just industrial stocks, but also stocks from most sectors and industries, except for utilities and transportation, which are measured by other indexes which are specific to those fields. The Dow Jones Industrial Average does not include just industrial stocks, but also stocks from most sectors and industries, except for utilities and transportation, which are measured by other indexes which are specific to those fields. According to S&P Global, the Dow Jones Industrial Average is a \"world-renowned gauge of the U.S. equity market.\" Most Dow Jones Industrial Average-listed companies trade on the New York Stock Exchange. ... You can\u2019t buy stock in the Dow Jones Industrial Average itself, but you can get exposure to the Dow and the companies included in the index. Your investment options include:",
+ "page_result": "\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n What Is the Dow Jones Industrial Average Stock Market Index? | The Motley Fool\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
What is the Dow Jones Industrial Average Stock Index?
The Dow Jones Industrial Average (DJINDICES:^DJI) is a stock index that tracks 30 of the largest U.S. companies. Created in 1896, it is one of the oldest stock indexes, and its performance is widely considered to be a useful indicator of the health of the entire U.S. stock market. The Dow Jones Industrial Average index is managed by S&P Dow Jones Indices, a joint venture majority-controlled by the financial information and analytics company S&P Global (SPGI 0.37%).
The Dow Jones Industrial Average does not include just industrial stocks, but also stocks from most sectors and industries, except for utilities and transportation, which are measured by other indexes which are specific to those fields.
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According to S&P Global, the Dow Jones Industrial Average is a \"world-renowned gauge of the U.S. equity market.\" Most Dow Jones Industrial Average-listed companies trade on the New York Stock Exchange.
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Image Source: Getty Images
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Can you buy Dow Jones stock?
Can you buy Dow Jones stock?
You can\u2019t buy stock in the Dow Jones Industrial Average itself, but you can get exposure to the Dow and the companies included in the index. Your investment options include:
Buy shares of all 30 companies included in the Dow Jones Industrial Average. With only 30 companies in the index, it's possible to directly purchase each stock in the Dow. Most brokers don't charge commissions on trades, and many allow fractional share investments, meaning you can buy partial shares. This investment alternative requires you to manage 30 separate stocks and make changes to your portfolio whenever the index changes (although, historically, the index only changes every couple of years).
Buy shares in a Dow-focused ETF.Exchange-traded funds that track the Dow's performance, such as the SPDR Dow Jones Industrial Average ETF (DIA -0.12%), will get you invested in the 30 companies listed in the Dow. Buying shares in an ETF is simpler than investing in 30 separate companies, and you are not obligated to make changes to your portfolio when the companies listed by the Dow change. As with most ETFs, an annual expense ratio -- a management fee -- is assessed by this ETF. The expense ratio of 0.16% works out to a fee of $1.60 per year for every $1,000 invested.
Invest in Dow options or futures contracts. You can buy Dow options contracts through the CBOE Global Markets options exchange and Dow futures contracts using the CME Group's (CME -0.26%) Chicago Mercantile Exchange. These types of securities are best suited for experienced investors since trading options and futures can be risky.
For novice investors who want portfolio exposure to a wide range of sectors through familiar large-cap stocks, the companies of the Dow Jones Industrial Average represent a good starting point for your research. That\u2019s especially true if you\u2019re seeking to invest in blue chip companies, which are generally the most stable and profitable on the market.
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A brief history
A brief history of the Dow Jones Industrial Average
The Dow Jones Industrial Average was established on May 26, 1896, by Charles Dow, who founded Dow Jones & Company -- parent company of The Wall Street Journal -- in 1882 with fellow journalists Edward Jones and Charles Bergstresser.
Initially, the Dow Jones Industrial Average was an index of 12 companies. Most were industrial companies such as General Electric (GE 0.88%). Over time, as the focus of the index shifted from measuring the performance of the heavy industrial sector to gauging the health of the entire U.S. stock market, the number of stocks in the index expanded. The index has been tracking 30 companies since 1928.
Companies in the DJIA
Companies in the Dow Jones Industrial Average
The Dow Jones Industrial Average tracks the stocks of these 30 companies:
How is the value of the Dow Jones Industrial Average calculated?
Most stock market indexes are weighted by market capitalization -- equal to share price times the number of shares outstanding -- but the Dow Jones Industrial Average is price-weighted. The value of the Dow Jones Industrial Average is calculated by determining the average value of the stock prices of the 30 listed companies. However, calculating that average value is not as simple as totaling the 30 stock prices and dividing by 30.
Mergers, spinoffs, stock splits, and other developments complicate the arithmetic and require a committee to formally determine a \"Dow divisor\" -- the denominator by which the sum of the 30 share prices is divided. As of June 2022, the Dow divisor was 0.151728. Using this divisor, you can calculate the value of the Dow Jones Industrial Average by adding up the share prices of all 30 Dow companies and dividing that amount by 0.151728.
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Any change in the share price of any Dow-listed company affects the value of the index equally, in accordance with Charles Dow's original vision. But it\u2019s important to realize that, on a percentage basis, the movements of the highest-priced stocks have the greatest impact on the index's value.
For example, as of June 1, 2022, the highest-priced stock on the Dow was UnitedHealth Group, trading at $490.35. The lowest-priced stock was Walgreen Boots Alliance, trading at $42.90. Since UnitedHealth's stock price is 11.4 times greater than Walgreen\u2019s, Walgreen\u2019s share price would have to change by 11.4% to have the same impact on the Dow as a change of just 1% in the price of UnitedHealth stock.
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Source: The Motley Fool
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The Dow Jones Industrial Average vs. the S&P 500 and the Nasdaq Composite
The Dow Jones Industrial Average is just one of three major indexes that many investors use to measure the performance of the stock market. The other two are the S&P 500 (SNPINDEX:^GSPC) and the Nasdaq Composite (NASDAQINDEX:^IXIC).
The S&P 500 is an index of 500 large-cap stocks that are chosen using certain criteria, such as market cap and profitability, by a committee of the S&P Dow Jones Indices. The Nasdaq index tracks more than 2,500 stocks, or almost every stock traded on the Nasdaq Exchange.
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Unlike the Dow, the S&P 500 and the Nasdaq are market capitalization-weighted, meaning that the most valuable companies influence index values the most. Both the S&P 500 and the Nasdaq are more heavily weighted toward technology stocks than the Dow, and the Nasdaq has the most tech exposure of all three indexes.
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The stocks of tech giants such as Amazon (AMZN -0.83%), Alphabet (GOOGL 0.77%) (GOOG 0.78%), Meta (formerly Facebook) (META -1.22%), and Tesla (TSLA -1.85%) aren\u2019t included in the Dow, but they are major components of the S&P 500 and the Nasdaq. The Dow underweights the tech sector and is more weighted than its peers toward cyclical sectors such as financial services and heavy industry. Despite the differences, the Dow and the S&P 500 tend to perform similarly.
Most professional investors focus on the performance of the S&P 500 because it includes a broad range of stocks and is weighted by market cap, which is a more accurate way to measure the overall health of the stock market. The Dow Jones Industrial Average may not be as comprehensive or precise as the S&P 500 or a total market index such as the Wilshire 5000 Total Market Index (WFIVX -0.58%), but this long-standing index still serves as a good indicator of the stock market\u2019s overall direction and functions as a convenient short list of some of the most powerful companies in the U.S.
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FAQs
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Dow Jones FAQs
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What is the Dow Jones?
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The Dow Jones Industrial Average is a stock index that tracks 30 of the largest U.S. companies. Created in 1896, it is one of the oldest stock indexes, and its performance is widely considered as a useful indicator of the health of the entire U.S. stock market.
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What are stock market indexes?
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A stock market index shows how investors feel an economy is faring. An index collects data from a variety of companies across industries. Together, that data forms a picture that helps investors compare current price levels with past prices to calculate market performance.
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What is the S&P 500?
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The S&P 500 (also known as the Standard & Poor's 500), a registered trademark of the joint venture S&P Dow Jones Indices, is a stock index that consists of the 500 largest companies in the U.S. It is generally considered the best indicator of how U.S. stocks are performing overall.
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\nJPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. American Express is an advertising partner of The Ascent, a Motley Fool company. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool\u2019s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool\u2019s board of directors. Jeremy Bowman has positions in Amazon, Meta Platforms, Nike, and Walt Disney. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Chevron, Cisco Systems, Goldman Sachs Group, Home Depot, JPMorgan Chase, Merck, Meta Platforms, Microsoft, Nike, S&P Global, Salesforce, Tesla, Visa, Walmart, and Walt Disney. The Motley Fool recommends 3M, Amgen, CME Group, Intel, International Business Machines, Johnson & Johnson, UnitedHealth Group, and Verizon Communications and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, long January 2025 $47.50 calls on Nike, long January 2026 $395 calls on Microsoft, short February 2024 $47 calls on Intel, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.\n
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Invest Smarter with The Motley Fool
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Join Over Half a Million Premium Members Receiving\u2026
Cumulative Growth of a $10,000 Investment in Stock Advisor
\n
Calculated by Time-Weighted Return since 2002. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns.
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+ "page_last_modified": ""
+ },
+ {
+ "page_name": "What Is the Dow Jones Industrial Average Stock Market Index? | ...",
+ "page_url": "https://www.fool.com/investing/stock-market/indexes/dow-jones/",
+ "page_snippet": "One of the oldest stock indexes, the Dow Jones tracks 30 of the largest U.S. companies. Create long-term wealth by learning to use the Dow.The Dow Jones Industrial Average (DJINDICES:^DJI) is a stock index that tracks 30 of the largest U.S. companies. Created in 1896, it is one of the oldest stock indexes, and its performance is widely considered to be a useful indicator of the health of the entire U.S. stock market. The Dow Jones Industrial Average index is managed by S&P Dow Jones Indices, a joint venture majority-controlled by the financial information and analytics company S&P Global (SPGI 0.15%). The Dow Jones Industrial Average index is managed by S&P Dow Jones Indices, a joint venture majority-controlled by the financial information and analytics company S&P Global (SPGI 0.15%). The Dow Jones Industrial Average does not include just industrial stocks, but also stocks from most sectors and industries, except for utilities and transportation, which are measured by other indexes which are specific to those fields. The Dow Jones Industrial Average does not include just industrial stocks, but also stocks from most sectors and industries, except for utilities and transportation, which are measured by other indexes which are specific to those fields. According to S&P Global, the Dow Jones Industrial Average is a \"world-renowned gauge of the U.S. equity market.\" Most Dow Jones Industrial Average-listed companies trade on the New York Stock Exchange. ... You can\u2019t buy stock in the Dow Jones Industrial Average itself, but you can get exposure to the Dow and the companies included in the index. Your investment options include:",
+ "page_result": "\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n What Is the Dow Jones Industrial Average Stock Market Index? | The Motley Fool\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
What is the Dow Jones Industrial Average Stock Index?
The Dow Jones Industrial Average (DJINDICES:^DJI) is a stock index that tracks 30 of the largest U.S. companies. Created in 1896, it is one of the oldest stock indexes, and its performance is widely considered to be a useful indicator of the health of the entire U.S. stock market. The Dow Jones Industrial Average index is managed by S&P Dow Jones Indices, a joint venture majority-controlled by the financial information and analytics company S&P Global (SPGI 0.37%).
The Dow Jones Industrial Average does not include just industrial stocks, but also stocks from most sectors and industries, except for utilities and transportation, which are measured by other indexes which are specific to those fields.
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According to S&P Global, the Dow Jones Industrial Average is a \"world-renowned gauge of the U.S. equity market.\" Most Dow Jones Industrial Average-listed companies trade on the New York Stock Exchange.
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Image Source: Getty Images
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Can you buy Dow Jones stock?
Can you buy Dow Jones stock?
You can\u2019t buy stock in the Dow Jones Industrial Average itself, but you can get exposure to the Dow and the companies included in the index. Your investment options include:
Buy shares of all 30 companies included in the Dow Jones Industrial Average. With only 30 companies in the index, it's possible to directly purchase each stock in the Dow. Most brokers don't charge commissions on trades, and many allow fractional share investments, meaning you can buy partial shares. This investment alternative requires you to manage 30 separate stocks and make changes to your portfolio whenever the index changes (although, historically, the index only changes every couple of years).
Buy shares in a Dow-focused ETF.Exchange-traded funds that track the Dow's performance, such as the SPDR Dow Jones Industrial Average ETF (DIA -0.12%), will get you invested in the 30 companies listed in the Dow. Buying shares in an ETF is simpler than investing in 30 separate companies, and you are not obligated to make changes to your portfolio when the companies listed by the Dow change. As with most ETFs, an annual expense ratio -- a management fee -- is assessed by this ETF. The expense ratio of 0.16% works out to a fee of $1.60 per year for every $1,000 invested.
Invest in Dow options or futures contracts. You can buy Dow options contracts through the CBOE Global Markets options exchange and Dow futures contracts using the CME Group's (CME -0.26%) Chicago Mercantile Exchange. These types of securities are best suited for experienced investors since trading options and futures can be risky.
For novice investors who want portfolio exposure to a wide range of sectors through familiar large-cap stocks, the companies of the Dow Jones Industrial Average represent a good starting point for your research. That\u2019s especially true if you\u2019re seeking to invest in blue chip companies, which are generally the most stable and profitable on the market.
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A brief history
A brief history of the Dow Jones Industrial Average
The Dow Jones Industrial Average was established on May 26, 1896, by Charles Dow, who founded Dow Jones & Company -- parent company of The Wall Street Journal -- in 1882 with fellow journalists Edward Jones and Charles Bergstresser.
Initially, the Dow Jones Industrial Average was an index of 12 companies. Most were industrial companies such as General Electric (GE 0.88%). Over time, as the focus of the index shifted from measuring the performance of the heavy industrial sector to gauging the health of the entire U.S. stock market, the number of stocks in the index expanded. The index has been tracking 30 companies since 1928.
Companies in the DJIA
Companies in the Dow Jones Industrial Average
The Dow Jones Industrial Average tracks the stocks of these 30 companies:
How is the value of the Dow Jones Industrial Average calculated?
Most stock market indexes are weighted by market capitalization -- equal to share price times the number of shares outstanding -- but the Dow Jones Industrial Average is price-weighted. The value of the Dow Jones Industrial Average is calculated by determining the average value of the stock prices of the 30 listed companies. However, calculating that average value is not as simple as totaling the 30 stock prices and dividing by 30.
Mergers, spinoffs, stock splits, and other developments complicate the arithmetic and require a committee to formally determine a \"Dow divisor\" -- the denominator by which the sum of the 30 share prices is divided. As of June 2022, the Dow divisor was 0.151728. Using this divisor, you can calculate the value of the Dow Jones Industrial Average by adding up the share prices of all 30 Dow companies and dividing that amount by 0.151728.
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Any change in the share price of any Dow-listed company affects the value of the index equally, in accordance with Charles Dow's original vision. But it\u2019s important to realize that, on a percentage basis, the movements of the highest-priced stocks have the greatest impact on the index's value.
For example, as of June 1, 2022, the highest-priced stock on the Dow was UnitedHealth Group, trading at $490.35. The lowest-priced stock was Walgreen Boots Alliance, trading at $42.90. Since UnitedHealth's stock price is 11.4 times greater than Walgreen\u2019s, Walgreen\u2019s share price would have to change by 11.4% to have the same impact on the Dow as a change of just 1% in the price of UnitedHealth stock.
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Source: The Motley Fool
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The Dow Jones Industrial Average vs. the S&P 500 and the Nasdaq Composite
The Dow Jones Industrial Average is just one of three major indexes that many investors use to measure the performance of the stock market. The other two are the S&P 500 (SNPINDEX:^GSPC) and the Nasdaq Composite (NASDAQINDEX:^IXIC).
The S&P 500 is an index of 500 large-cap stocks that are chosen using certain criteria, such as market cap and profitability, by a committee of the S&P Dow Jones Indices. The Nasdaq index tracks more than 2,500 stocks, or almost every stock traded on the Nasdaq Exchange.
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Unlike the Dow, the S&P 500 and the Nasdaq are market capitalization-weighted, meaning that the most valuable companies influence index values the most. Both the S&P 500 and the Nasdaq are more heavily weighted toward technology stocks than the Dow, and the Nasdaq has the most tech exposure of all three indexes.
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The stocks of tech giants such as Amazon (AMZN -0.83%), Alphabet (GOOGL 0.77%) (GOOG 0.78%), Meta (formerly Facebook) (META -1.22%), and Tesla (TSLA -1.85%) aren\u2019t included in the Dow, but they are major components of the S&P 500 and the Nasdaq. The Dow underweights the tech sector and is more weighted than its peers toward cyclical sectors such as financial services and heavy industry. Despite the differences, the Dow and the S&P 500 tend to perform similarly.
Most professional investors focus on the performance of the S&P 500 because it includes a broad range of stocks and is weighted by market cap, which is a more accurate way to measure the overall health of the stock market. The Dow Jones Industrial Average may not be as comprehensive or precise as the S&P 500 or a total market index such as the Wilshire 5000 Total Market Index (WFIVX -0.58%), but this long-standing index still serves as a good indicator of the stock market\u2019s overall direction and functions as a convenient short list of some of the most powerful companies in the U.S.
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FAQs
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Dow Jones FAQs
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What is the Dow Jones?
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The Dow Jones Industrial Average is a stock index that tracks 30 of the largest U.S. companies. Created in 1896, it is one of the oldest stock indexes, and its performance is widely considered as a useful indicator of the health of the entire U.S. stock market.
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What are stock market indexes?
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A stock market index shows how investors feel an economy is faring. An index collects data from a variety of companies across industries. Together, that data forms a picture that helps investors compare current price levels with past prices to calculate market performance.
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What is the S&P 500?
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The S&P 500 (also known as the Standard & Poor's 500), a registered trademark of the joint venture S&P Dow Jones Indices, is a stock index that consists of the 500 largest companies in the U.S. It is generally considered the best indicator of how U.S. stocks are performing overall.
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\nJPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. American Express is an advertising partner of The Ascent, a Motley Fool company. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool\u2019s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool\u2019s board of directors. Jeremy Bowman has positions in Amazon, Meta Platforms, Nike, and Walt Disney. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Chevron, Cisco Systems, Goldman Sachs Group, Home Depot, JPMorgan Chase, Merck, Meta Platforms, Microsoft, Nike, S&P Global, Salesforce, Tesla, Visa, Walmart, and Walt Disney. The Motley Fool recommends 3M, Amgen, CME Group, Intel, International Business Machines, Johnson & Johnson, UnitedHealth Group, and Verizon Communications and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, long January 2025 $47.50 calls on Nike, long January 2026 $395 calls on Microsoft, short February 2024 $47 calls on Intel, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.\n
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Invest Smarter with The Motley Fool
\n
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Join Over Half a Million Premium Members Receiving\u2026
Cumulative Growth of a $10,000 Investment in Stock Advisor
\n
Calculated by Time-Weighted Return since 2002. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns.
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+ "page_last_modified": ""
+ },
+ {
+ "page_name": "What Is the Dow Jones Industrial Average Stock Market Index? | ...",
+ "page_url": "https://www.fool.com/investing/stock-market/indexes/dow-jones/",
+ "page_snippet": "One of the oldest stock indexes, the Dow Jones tracks 30 of the largest U.S. companies. Create long-term wealth by learning to use the Dow.The Dow Jones Industrial Average (DJINDICES:^DJI) is a stock index that tracks 30 of the largest U.S. companies. Created in 1896, it is one of the oldest stock indexes, and its performance is widely considered to be a useful indicator of the health of the entire U.S. stock market. The Dow Jones Industrial Average index is managed by S&P Dow Jones Indices, a joint venture majority-controlled by the financial information and analytics company S&P Global (SPGI 0.15%). The Dow Jones Industrial Average index is managed by S&P Dow Jones Indices, a joint venture majority-controlled by the financial information and analytics company S&P Global (SPGI 0.15%). The Dow Jones Industrial Average does not include just industrial stocks, but also stocks from most sectors and industries, except for utilities and transportation, which are measured by other indexes which are specific to those fields. The Dow Jones Industrial Average does not include just industrial stocks, but also stocks from most sectors and industries, except for utilities and transportation, which are measured by other indexes which are specific to those fields. According to S&P Global, the Dow Jones Industrial Average is a \"world-renowned gauge of the U.S. equity market.\" Most Dow Jones Industrial Average-listed companies trade on the New York Stock Exchange. ... You can\u2019t buy stock in the Dow Jones Industrial Average itself, but you can get exposure to the Dow and the companies included in the index. Your investment options include:",
+ "page_result": "\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n What Is the Dow Jones Industrial Average Stock Market Index? | The Motley Fool\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
What is the Dow Jones Industrial Average Stock Index?
The Dow Jones Industrial Average (DJINDICES:^DJI) is a stock index that tracks 30 of the largest U.S. companies. Created in 1896, it is one of the oldest stock indexes, and its performance is widely considered to be a useful indicator of the health of the entire U.S. stock market. The Dow Jones Industrial Average index is managed by S&P Dow Jones Indices, a joint venture majority-controlled by the financial information and analytics company S&P Global (SPGI 0.37%).
The Dow Jones Industrial Average does not include just industrial stocks, but also stocks from most sectors and industries, except for utilities and transportation, which are measured by other indexes which are specific to those fields.
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According to S&P Global, the Dow Jones Industrial Average is a \"world-renowned gauge of the U.S. equity market.\" Most Dow Jones Industrial Average-listed companies trade on the New York Stock Exchange.
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Image Source: Getty Images
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Can you buy Dow Jones stock?
Can you buy Dow Jones stock?
You can\u2019t buy stock in the Dow Jones Industrial Average itself, but you can get exposure to the Dow and the companies included in the index. Your investment options include:
Buy shares of all 30 companies included in the Dow Jones Industrial Average. With only 30 companies in the index, it's possible to directly purchase each stock in the Dow. Most brokers don't charge commissions on trades, and many allow fractional share investments, meaning you can buy partial shares. This investment alternative requires you to manage 30 separate stocks and make changes to your portfolio whenever the index changes (although, historically, the index only changes every couple of years).
Buy shares in a Dow-focused ETF.Exchange-traded funds that track the Dow's performance, such as the SPDR Dow Jones Industrial Average ETF (DIA -0.12%), will get you invested in the 30 companies listed in the Dow. Buying shares in an ETF is simpler than investing in 30 separate companies, and you are not obligated to make changes to your portfolio when the companies listed by the Dow change. As with most ETFs, an annual expense ratio -- a management fee -- is assessed by this ETF. The expense ratio of 0.16% works out to a fee of $1.60 per year for every $1,000 invested.
Invest in Dow options or futures contracts. You can buy Dow options contracts through the CBOE Global Markets options exchange and Dow futures contracts using the CME Group's (CME -0.26%) Chicago Mercantile Exchange. These types of securities are best suited for experienced investors since trading options and futures can be risky.
For novice investors who want portfolio exposure to a wide range of sectors through familiar large-cap stocks, the companies of the Dow Jones Industrial Average represent a good starting point for your research. That\u2019s especially true if you\u2019re seeking to invest in blue chip companies, which are generally the most stable and profitable on the market.
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A brief history
A brief history of the Dow Jones Industrial Average
The Dow Jones Industrial Average was established on May 26, 1896, by Charles Dow, who founded Dow Jones & Company -- parent company of The Wall Street Journal -- in 1882 with fellow journalists Edward Jones and Charles Bergstresser.
Initially, the Dow Jones Industrial Average was an index of 12 companies. Most were industrial companies such as General Electric (GE 0.88%). Over time, as the focus of the index shifted from measuring the performance of the heavy industrial sector to gauging the health of the entire U.S. stock market, the number of stocks in the index expanded. The index has been tracking 30 companies since 1928.
Companies in the DJIA
Companies in the Dow Jones Industrial Average
The Dow Jones Industrial Average tracks the stocks of these 30 companies:
How is the value of the Dow Jones Industrial Average calculated?
Most stock market indexes are weighted by market capitalization -- equal to share price times the number of shares outstanding -- but the Dow Jones Industrial Average is price-weighted. The value of the Dow Jones Industrial Average is calculated by determining the average value of the stock prices of the 30 listed companies. However, calculating that average value is not as simple as totaling the 30 stock prices and dividing by 30.
Mergers, spinoffs, stock splits, and other developments complicate the arithmetic and require a committee to formally determine a \"Dow divisor\" -- the denominator by which the sum of the 30 share prices is divided. As of June 2022, the Dow divisor was 0.151728. Using this divisor, you can calculate the value of the Dow Jones Industrial Average by adding up the share prices of all 30 Dow companies and dividing that amount by 0.151728.
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Any change in the share price of any Dow-listed company affects the value of the index equally, in accordance with Charles Dow's original vision. But it\u2019s important to realize that, on a percentage basis, the movements of the highest-priced stocks have the greatest impact on the index's value.
For example, as of June 1, 2022, the highest-priced stock on the Dow was UnitedHealth Group, trading at $490.35. The lowest-priced stock was Walgreen Boots Alliance, trading at $42.90. Since UnitedHealth's stock price is 11.4 times greater than Walgreen\u2019s, Walgreen\u2019s share price would have to change by 11.4% to have the same impact on the Dow as a change of just 1% in the price of UnitedHealth stock.
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Source: The Motley Fool
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The Dow Jones Industrial Average vs. the S&P 500 and the Nasdaq Composite
The Dow Jones Industrial Average is just one of three major indexes that many investors use to measure the performance of the stock market. The other two are the S&P 500 (SNPINDEX:^GSPC) and the Nasdaq Composite (NASDAQINDEX:^IXIC).
The S&P 500 is an index of 500 large-cap stocks that are chosen using certain criteria, such as market cap and profitability, by a committee of the S&P Dow Jones Indices. The Nasdaq index tracks more than 2,500 stocks, or almost every stock traded on the Nasdaq Exchange.
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Unlike the Dow, the S&P 500 and the Nasdaq are market capitalization-weighted, meaning that the most valuable companies influence index values the most. Both the S&P 500 and the Nasdaq are more heavily weighted toward technology stocks than the Dow, and the Nasdaq has the most tech exposure of all three indexes.
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The stocks of tech giants such as Amazon (AMZN -0.83%), Alphabet (GOOGL 0.77%) (GOOG 0.78%), Meta (formerly Facebook) (META -1.22%), and Tesla (TSLA -1.85%) aren\u2019t included in the Dow, but they are major components of the S&P 500 and the Nasdaq. The Dow underweights the tech sector and is more weighted than its peers toward cyclical sectors such as financial services and heavy industry. Despite the differences, the Dow and the S&P 500 tend to perform similarly.
Most professional investors focus on the performance of the S&P 500 because it includes a broad range of stocks and is weighted by market cap, which is a more accurate way to measure the overall health of the stock market. The Dow Jones Industrial Average may not be as comprehensive or precise as the S&P 500 or a total market index such as the Wilshire 5000 Total Market Index (WFIVX -0.58%), but this long-standing index still serves as a good indicator of the stock market\u2019s overall direction and functions as a convenient short list of some of the most powerful companies in the U.S.
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FAQs
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Dow Jones FAQs
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What is the Dow Jones?
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The Dow Jones Industrial Average is a stock index that tracks 30 of the largest U.S. companies. Created in 1896, it is one of the oldest stock indexes, and its performance is widely considered as a useful indicator of the health of the entire U.S. stock market.
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What are stock market indexes?
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A stock market index shows how investors feel an economy is faring. An index collects data from a variety of companies across industries. Together, that data forms a picture that helps investors compare current price levels with past prices to calculate market performance.
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What is the S&P 500?
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The S&P 500 (also known as the Standard & Poor's 500), a registered trademark of the joint venture S&P Dow Jones Indices, is a stock index that consists of the 500 largest companies in the U.S. It is generally considered the best indicator of how U.S. stocks are performing overall.
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\nJPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. American Express is an advertising partner of The Ascent, a Motley Fool company. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool\u2019s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool\u2019s board of directors. Jeremy Bowman has positions in Amazon, Meta Platforms, Nike, and Walt Disney. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Chevron, Cisco Systems, Goldman Sachs Group, Home Depot, JPMorgan Chase, Merck, Meta Platforms, Microsoft, Nike, S&P Global, Salesforce, Tesla, Visa, Walmart, and Walt Disney. The Motley Fool recommends 3M, Amgen, CME Group, Intel, International Business Machines, Johnson & Johnson, UnitedHealth Group, and Verizon Communications and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, long January 2025 $47.50 calls on Nike, long January 2026 $395 calls on Microsoft, short February 2024 $47 calls on Intel, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.\n
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Calculated by Time-Weighted Return since 2002. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns.
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+ "page_snippet": "The Dow Jones Industrial Average (DJIA), Dow Jones, or simply the Dow (/\u02c8da\u028a/), is a stock market index of 30 prominent companies listed on stock exchanges in the United States. The DJIA is one of the oldest and most commonly followed equity indexes. Many professionals consider it to be an ...First calculated on May 26, 1896, the index is the second-oldest among U.S. market indices, after the Dow Jones Transportation Average. It was created by Charles Dow, co-founder of both The Wall Street Journal and the Dow Jones & Company, and named after him and his business associate, statistician Edward Jones. The index is maintained by S&P Dow Jones Indices, an entity majority-owned by S&P Global. Its components are selected by a committee. The ten components with the largest dividend yields are commonly referred to as the Dogs of the Dow. As with all stock prices, the prices of the constituent stocks and consequently the value of the index itself are affected by the performance of the respective companies as well as macroeconomic factors. It was created by Charles Dow, co-founder of both The Wall Street Journal and the Dow Jones & Company, and named after him and his business associate, statistician Edward Jones. The index is maintained by S&P Dow Jones Indices, an entity majority-owned by S&P Global. ProShares offers leveraged ETFs that attempt to produce three times the daily result of either investing in (NYSE Arca: UDOW) or shorting (NYSE Arca: SDOW) the Dow Jones Industrial Average. In the derivatives market, the CME Group through its subsidiaries the Chicago Mercantile Exchange (CME) and the Chicago Board of Trade (CBOT), issues Futures Contracts; the E-mini Dow ($5) Futures (YM), which track the average and trade on their exchange floors respectively. The following table shows the annual development of the Dow Jones Index, which was calculated back to 1896. In 1884, Charles Dow composed his first stock average, which contained nine railroads and two industrial companies that appeared in the Customer's Afternoon Letter, a daily two-page financial news bulletin which was the precursor to The Wall Street Journal.",
+ "page_result": "\n\n\n\nDow Jones Industrial Average - Wikipedia\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nJump to content\n
The DJIA is one of the oldest and most commonly followed equity indexes. Many professionals consider it to be an inadequate representation of the overall U.S. stock market compared to a broader market index such as the S&P 500. The DJIA includes only 30 large companies. It is price-weighted, unlike stock indices, which use market capitalization. Furthermore, the DJIA does not use a weighted arithmetic mean.[4][5][6][7]\n
The value of the index can also be calculated as the sum of the stock prices of the companies included in the index, divided by a factor, which is approximately 0.153 as of February 2024[update]. The factor is changed whenever a constituent company undergoes a stock split so that the value of the index is unaffected by the stock split.\n
The index is maintained by S&P Dow Jones Indices, an entity majority-owned by S&P Global. Its components are selected by a committee. The ten components with the largest dividend yields are commonly referred to as the Dogs of the Dow. As with all stock prices, the prices of the constituent stocks and consequently the value of the index itself are affected by the performance of the respective companies as well as macroeconomic factors.\n
As of February 26, 2024, the components of the DJIA have changed 58 times since its beginning on May 26, 1896. General Electric had the longest continuous presence on the index, beginning in the original index in 1896 and ending in 2018. Changes to the index since 1991 are as follows:\n
On February 19, 2008, Chevron Corporation and Bank of America replaced Altria Group and Honeywell. Chevron was previously a Dow component from July 18, 1930, to November 1, 1999. During Chevron's absence, its split-adjusted price per share went from $44 to $85, while the price of petroleum rose from $24 to $100 per barrel.[13]
On March 19, 2015, Apple Inc. replaced AT&T, which had been a component of the DJIA since November 1916.[22][23] Apple became the fourth company traded on the NASDAQ to be part of the Dow.
On June 26, 2018, Walgreens Boots Alliance replaced General Electric, which had been a component of the DJIA since November 1907, after being part of the inaugural index in May 1896 and much of the 1896 to 1907 period.[25][26][27]
In the derivatives market, the CME Group through its subsidiaries the Chicago Mercantile Exchange (CME) and the Chicago Board of Trade (CBOT), issues Futures Contracts; the E-mini Dow ($5) Futures (YM), which track the average and trade on their exchange floors respectively. Trading is typically carried out in an open outcry auction, or over an electronic network such as CME's Globex platform.\n
The Chicago Board Options Exchange (CBOE) issues option contracts on the Dow through the root symbol DJX. Options on various Dow-underlying ETFs are also available for trading.[36]\n
\nDJIA monthly trading volume in shares from 1929 to 2012\n
In 1884, Charles Dow composed his first stock average, which contained nine railroads and two industrial companies that appeared in the Customer's Afternoon Letter, a daily two-page financial news bulletin which was the precursor to The Wall Street Journal. On January 2, 1886, the number of stocks represented in what is now the Dow Jones Transportation Average dropped from 14 to 12, as the Central Pacific Railroad and Central Railroad of New Jersey were removed. Though comprising the same number of stocks, this index contained only one of the original twelve industrials that would eventually form Dow's most famous index.[39]\n
Dow calculated his first average purely of industrial stocks on May 26, 1896, creating what is now known as the Dow Jones Industrial Average. None of the original 12 industrials still remain part of the index.[40]\n
When it was first published in the mid-1880s, the index stood at a level of 62.76. It reached a peak of 78.38 during the summer of 1890, but ended up hitting its all-time low of 28.48 in the summer of 1896 during the Panic of 1896. Many of the biggest percentage price moves in the Dow occurred early in its history, as the nascent industrial economy matured. In the 1900s, the Dow halted its momentum as it worked its way through two financial crises: the Panic of 1901 and the Panic of 1907. The Dow remained stuck in a range between 53 and 103 until late 1914. The negativity surrounding the 1906 San Francisco earthquake did little to improve the economic climate; the index broke 100 for the first time in 1906.[43]\n
At the start of the 1910s, the Panic of 1910\u20131911 stifled economic growth. On July 30, 1914, as the average stood at a level of 71.42, a decision was made to close down the New York Stock Exchange, and suspend trading for a span of four and a half months. Some historians believe the exchange was closed because of a concern that markets would plunge as a result of panic over the onset of World War I. An alternative explanation is that the United States Secretary of the Treasury, William Gibbs McAdoo, closed the exchange to conserve the U.S. gold stock in order to launch the Federal Reserve System later that year, with enough gold to keep the United States on par with the gold standard. When the markets reopened on December 12, 1914, the index closed at 74.56, a gain of 4.4%. This is frequently reported as a large drop, due to using a later redefinition. Reports from the time say that the day was positive.[44] Following World War I, the United States experienced another economic downturn, the Post\u2013World War I recession. The Dow's performance remained unchanged from the closing value of the previous decade, adding only 8.26%, from 99.05 at the beginning of 1910, to a level of 107.23 at the end of 1919.[45]\n
The Dow experienced a long bull run from 1920 to late 1929 when it rose from 73 to 381 points.[46] In 1928, the components of the Dow were increased to 30 stocks near the economic height of that decade, which was nicknamed the Roaring Twenties. This period downplayed the influence of the Depression of 1920\u201321 and certain international conflicts such as the Polish\u2013Soviet War, the Irish Civil War, the Turkish War of Independence and the initial phase of the Chinese Civil War. After a peak of 381.17 on September 3, 1929, the bottom of the 1929 crash came just 2 months later on November 13, 1929, at 195.35 intraday, closing slightly higher at 198.69.[47] The Wall Street Crash of 1929 and the ensuing Great Depression over the next several years saw the Dow to continue to fall until July 8, 1932, when it closed at $41.22,[48] roughly two-thirds of its mid-1880s starting point and almost 90% below its peak. Overall for the 1920s decade, the Dow still ended with a healthy 131.7% gain, from 107.23 to 248.48 at the end of 1929.[46] In inflation-adjusted numbers, the high of 381.17 on September 3, 1929, was not surpassed until 1954.\n
Marked by global instability and the Great Depression, the 1930s contended with several consequential European and Asian outbreaks of war, leading up to catastrophic World War II in 1939. Other conflicts during the decade which affected the stock market included the 1936\u20131939 Spanish Civil War, the 1935\u20131936 Second Italo-Abyssinian War, the Soviet-Japanese Border War of 1939, and the Second Sino-Japanese War of 1937. The United States experienced the Recession of 1937\u20131938, which temporarily brought economic recovery to a halt. The largest one-day percentage gain in the index happened in the depths of the 1930s bear market on March 15, 1933, when the Dow gained 15.34% to close at 62.10. However, as a whole throughout the Great Depression, the Dow posted some of its worst performances, for a negative return during most of the 1930s for new and old stock market investors. For the decade, the Dow Jones average was down from 248.48 at the beginning of 1930, to a stable level of 150.24 at the end of 1939, a loss of about 40%.[49]\n
Post-war reconstruction during the 1940s, along with renewed optimism of peace and prosperity, brought about a 33% surge in the Dow from 150.24 to 200.13. The strength in the Dow occurred despite the Recession of 1949 and various global conflicts.\n
During the 1950s, the Korean War and the Cold War did not stop the Dow's climb higher. A nearly 240% increase in the average from 200.13 to 679.36 ensued over the course of that decade.\n
The Dow began to stall during the 1960s as the markets trudged through the Kennedy Slide of 1962, but still managed a respectable 18% gain from 679.36 to 800.36.\n
The 1970s marked a time of economic uncertainty and troubled relations between the U.S. and certain Middle-Eastern countries. The 1970s energy crisis was a prelude to a disastrous economic climate along with stagflation, the combination of high unemployment and high inflation. However, on November 14, 1972, the average closed at 1,003.16, above the 1,000 mark for the first time, during a brief relief rally in the midst of a lengthy bear market.[43] Between January 1973 and December 1974, the average lost 48% of its value in what became known as the 1973\u20131974 stock market crash, closing at 577.60 on December 4, 1974. In 1976, the index reached 1,000 several times and it closed the year at 1,004.75. Although the Vietnam War ended in 1975, new tensions arose towards Iran surrounding the Iranian Revolution in 1979. Performance-wise for the 1970s, the index remained virtually flat, rising 4.8% from 800.36 to 838.74.\n
\nThe Dow fell 22.61% on Black Monday (1987) from about the 2,500 level to around 1,750. Two days later, it rose 10.15% above the 2,000 level for a mild recovery attempt.\n
The 1980s began with the early 1980s recession. In early 1981, the index broke above 1,000 several times, but then retreated. After closing above 2,000 in January 1987,[43] the largest one-day percentage drop occurred on Black Monday, October 19, 1987, when the average fell 22.61%. There were no clear reasons given to explain the crash.\n
On October 13, 1989, the Friday the 13th mini-crash, which initiated the collapse of the junk bond market, resulted in a loss of almost 7% of the index in a single day.[50]\n
The Dow soared from 2,753 to 8,000 between January 1990 to July 1997.[43] In October 1997, the events surrounding the 1997 Asian financial crisis plunged the Dow into a 554-point loss to a close of 7,161.15; a retrenchment of 7.18% in what became known as the October 27, 1997 mini-crash.\n
On March 29, 1999, the average closed at 10,006.78, its first close above 10,000. This prompted a celebration on the trading floor, complete with party hats.[54] Total gains for the decade exceeded 315%; from 2,753.20 to 11,497.12, which equates to 12.3% annually.\n
The Dow averaged a 5.3% return compounded annually for the 20th century, a record Warren Buffett called \"a wonderful century\"; when he calculated that to achieve that return again, the index would need to close at about 2,000,000 by December 2099.[55]\n
\nThe Dow fell 14.3% after the September 11 attacks. Exchanges were closed from September 12 through September 16, 2001.\n
On September 17, 2001, the first day of trading after the September 11 attacks, the Dow fell 7.1%. However, the Dow began an upward trend shortly after the attacks, and quickly regained all lost ground to close above 10,000 for the year. In 2002, the Dow dropped to a four-year low of 7286 on September 24, 2002, due to the stock market downturn of 2002 and lingering effects of the dot-com bubble. Overall, while the NASDAQ fell roughly 75% and the S&P 500 fell roughly 50% between 2000 and 2002, the Dow only fell 27% during the same period. In 2003, the Dow held steady within the 7,000 to 9,000-point level and recovered to the 10,000 mark by year end.[56]\n
The Dow continued climbing and reached a record high of 14,198.10 on October 11, 2007, a mark which was not matched until March 2013.[57] It then dropped for the next year due to the Financial crisis of 2007\u20132008.\n
On September 15, 2008, a wider financial crisis became evident when Lehman Brothers filed for bankruptcy along with the economic effect of record high oil prices which had reached almost $150 per barrel two months earlier. The Dow lost more than 500 points for the day, returning to its mid-July lows below 11,000.[58][59] A series of bailout packages, including the Emergency Economic Stabilization Act of 2008, proposed and implemented by the Federal Reserve and United States Department of the Treasury did not prevent further losses. After nearly six months of extreme volatility during which the Dow experienced its largest one-day point loss, largest daily point gain, and largest intraday range (of more than 1,000 points) at the time, the index closed at a new 12-year low of 6,547.05 on March 9, 2009,[60] its lowest close since April 1997. The Dow had lost 20% of its value in only six weeks.\n
Towards the latter half of 2009, the average rallied towards the 10,000 level amid optimism that the Late-2000s recession, the United States housing bubble and the financial crisis of 2007\u20132008, were easing and possibly coming to an end. For the decade, the Dow saw a rather substantial pullback for a negative return from 11,497.12 to 10,428.05, a loss of a 9.3%.[61]\n
On May 6, 2010, the Dow lost 9.2% intra-day and regained nearly all of it within a single hour. This event, which became known as the 2010 Flash Crash, sparked new regulations to prevent future incidents.[62]\n
Six years after its previous high in 2007, the Dow finally closed at a new record high on March 5, 2013.[63] It continued rising for the next several years past 17,000 points until a brief 2015\u201316 stock market selloff in the second half of 2015.[64] It then picked up again early 2016 and climbed past 25,000 points on January 4, 2018.[65]\n
Volatility returned in 2018 when the Dow fell nearly 20%.[67][68][69] By early January 2019, the index had quickly rallied more than 10% from its Christmas Eve low.[70]\n
Overall in the 2010s decade, the Dow increased from 10,428.05 to 28,538.44 for a substantial gain of 174%.[71]\n
\nThe Dow Jones Industrial Average daily closing value plotted on a log-10 scale\n
Despite the emerging COVID-19 pandemic, the Dow continued its bull run from the previous decade before peaking at 29,551.42 on February 12, 2020 (29,568.57 intraday on the same day). The index slowly retreated for the remainder of the week and into the next week, before coronavirus fears and an oil price war between Saudi Arabia and Russia sent the index into a tailspin, recording several days of losses[72] (and gains[73]) of at least 1,000 points, a typical symptom of a bear market[74] as previously seen in October 2008 during the financial crisis. Volatility rose high enough to trigger multiple 15-minute trading halts.[75] In the first quarter of 2020, the DJIA fell 23%, its worst quarter since 1987.[76] The market recovered in the third quarter, returning to 28,837.52 on October 12, 2020, and peaked momentarily at a new all-time high of 29,675.25 on November 9, 2020, at 14:00 ET, following that day's announcement of the success of the Pfizer\u2013BioNTech COVID-19 vaccine in Phase III clinical trials.[77] The Dow (as reported by the UPI) closed over 30,000 on December 31, 2020, at a record 30,606.48. On November 24, following news that the presidential transition of Joe Biden was approved, the Dow increased by more than 500 points, closing at 30,046.24. On January 22, 2024, the Dow Jones crossed 38,000 points for the first time; a month later it surpassed 39,000.\n
The DJIA is computed as the sum of the prices of all thirty stocks divided by a divisor, the Dow Divisor. The divisor is adjusted in case of stock splits, spinoffs or similar structural changes, to ensure that such events do not in themselves alter the numerical value of the DJIA. Early on, the initial divisor was composed of the original number of component companies; this initially made the DJIA a simple arithmetic average. The present divisor, after many adjustments, is less than one, making the index larger than the sum of the prices of the components.\nThat is:\n
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where p are the prices of the component stocks and d is the Dow Divisor.\n
Events such as stock splits or changes in the list of the companies composing the index alter the sum of the component prices. In these cases, in order to avoid discontinuity in the index, the Dow Divisor is updated so that the quotations right before and after the event coincide:\n
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Since February 26, 2024,[update] the Dow Divisor is 0.15265312230608[78][79] and every $1 change in price in a particular stock within the average equates to a 6.5508 (or 1 \u00f7 0.15265312230608) point movement.\n
With the inclusion of only 30 stocks, critics such as Ric Edelman argue that the DJIA is an inaccurate representation of overall market performance compared to more comprehensive indexes such as the S&P 500 Index or the Russell 3000 Index. Additionally, the DJIA is criticized for being a price-weighted index, which gives higher-priced stocks more influence over the average than their lower-priced counterparts, but takes no account of the relative industry size or market capitalization of the components. For example, a $1 increase in a lower-priced stock can be negated by a $1 decrease in a much higher-priced stock, even though the lower-priced stock experienced a larger percentage change. In addition, a $1 move in the smallest component of the DJIA has the same effect as a $1 move in the largest component of the average. For example, during September\u2013October 2008, former component AIG's reverse split-adjusted stock price collapsed from $22.76 on September 8 to $1.35 on October 27; contributing to a roughly 3,000-point drop in the index.[80]\n
As of June 2021,[update] Goldman Sachs and UnitedHealth Group are among the highest-priced stocks in the average and therefore have the greatest influence on it. Alternately, Cisco Systems and Coca-Cola are among the lowest-priced stocks in the average and have the least sway in the price movement.[81] Critics of the DJIA and most securities professionals recommend the market-capitalization weighted S&P 500 Index or the Wilshire 5000, the latter of which includes most publicly listed U.S. stocks, as better indicators of the U.S. stock market.\n
A study between the correlation of components of the Dow Jones Industrial Average compared with the movement of the index finds that the correlation is higher when the stocks are declining. The correlation is lowest in a time when the average is flat or rises a modest amount.[82]\n
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\n\t![\"A](\"/wiki/File:DJIA_historical_graph_(log).svg\")
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