The Dow Jones Industrial Average is the most popular and best known measure of stock prices on the New york Stock Exchange.It is a list of the stocks of 30 major American companies. It is desgined to show which directions stock prices are moving.
There are three other Dow Jones Stock Averages. One is of 20 transportation companies.Another is of 15 gas and electric power companies. And the third is of industrial transportation and power companies together. But the Dow Jones Industrial Average is the one considered most important in world money markets.
Charles Dow was a newspapar reporter. He and Edward Jones began their company in 1882 to provide business news. Seven years later, they began publishing a newspapar. Charles Dow reportedly was the first person to measure the general level of stock prices by finding the prices of a few representative stocks.
A stock is a share of ownership in a company. Investor earn money by buying and selling stocks. So the value of any stock is changing continually, Charles Dow decided the change in the value of a group of stocks would show if prices of most stocks on the New York Stock Exchange were moving up or donw. His first list appeared in 1884. It included mostly stocks of railroad companies. In 1897, he began the industrial average--- a list of stocks 12 industrial companies.18 more companies were added by 1928. The 30 companies on the list now included such major ones as Cocacola, General Motors and McDonald. The list is changed from time to time so that new companies are represented.
Since the Dow Jones Averages were first published, many other companies have developed their own lists of stock prices. but the Dow Jones Industrial Average still is considered the most important measure of how the New york Stock Exchange is doing. It is watched by investors to decide if they want to sell or buy stocks and it is watched by economic experts as one sign of how the American economy is doing.
