|By The Associated Press|
The Dow Jones industrial average, an index of 30 U.S. blue-chip stocks, is the oldest barometer of the stock market. On Friday, it jumped above 17,000 for the first time in its 118-year history.
WHAT IS IT?
The Dow is a group of 30 big corporations, nearly all of them household names, and its dips and jumps during the trading day reflect changes in their share prices. Its exclusive roster runs from
The Dow may not be the best measure, but the oldest index remains the best-known shorthand for the stock market.
In the late 19th century, following a number of bubbles and busts, most investors considered the stock market a dangerous place.
The original Dow Jones industrial average had 12 big businesses including American
The number of companies making up the index expanded to 20 in 1916 and then to 30 in 1928. The number has remained the same since then, though the cast of characters changes every few years. Last September,
Entry is restricted to a company that "has an excellent reputation, demonstrates sustained growth and is of interest to a large number of investors," according to the Dow's managers.
The Dow's biggest point jump was on
Its biggest percentage jump was more than 15 percent when it reopened on
The Dow's biggest point drop came on
In percentage terms, the Dow's biggest drop was on
The Dow's lowest level was 28.48, reached on
WHO OWNS IT
The Dow Jones industrial average is no longer run by Dow Jones, the media company that publishes
The Dow is a price-weighted index. Most other indexes account for a company's overall market value, which is found by multiplying the number of shares outstanding by the stock price. For the Dow, the price is all that matters. So, a
The Standard & Poor's 500 index accounts for a company's market value, making it a more accurate reflection of the market. As a result, mutual funds use it as a benchmark for their performance instead of the Dow.
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