Twenty Something Sense

The dow was down 400 points today, the dow was up today, how’s the dow looking? We hear this everyday and everyone talks about ‘the dow’ as some magical being. When you say ‘the dow,’ do you actually know what it is?

‘The Dow’ is a stock market index that was created by Charles Dow (a WSJ Editor) to determine the performance of the Industrial Sector of American stock market. The Dow (the number that everyone throws around daily) is the average of 30 of the largest and most widely held American companies and is used as an indicator for the overall US market.

So, what companies are on this special list of 30? Here they are (as of 3/6/2009):

3M
Alcoa
American Express
AT&T
Bank of America
Boeing
Caterpillar
Chevron
CitiGroup
Coca-Cola
Dupont
Exxon
GE
GM
HP
Intel
IBM
Johnson & Johnson
JP Morgan
Kraft
McDonald’s
Merck
Microsoft
Pfizer
P&G
United Technologies
Verizon
Wal-mart
Walt Disney

For those wondering how the DJIA is calculated, it is price-weighted and is a scaled average. For more details see this.