You’re probably familiar with the Dow Jones Industrial Average, or INDEXDJX DJI, as it’s commonly known. It was created in 1896.
The DJIA is a great way to follow the stock market over time — even though it doesn’t exactly reflect what’s going on today. It’s also a useful tool for getting an idea of how things have changed over time.
For example, if you’ve been following along with me for a while now, you might be wondering why I’m talking about the DJIA in this article about Bitcoin and blockchain technology. Well, there’s actually a connection between these two topics: Both are historically volatile assets that have seen huge increases in value recently. And both have their origins in financial markets — specifically, Wall Street (NYSE:BATS) and Silicon Valley (NASDAQ:GOOGL).
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Historical Prices of the Dow Jones Industrial Average (INDEXDJX DJI)
The Dow Jones Industrial Average (INDEXDJX DJI) is most often used as a benchmark for stocks traded on the New York Stock Exchange. But it has also been used as a barometer of American economic trends and as a measure of United States competitiveness in world markets.
The Dow Jones Industrial Average was first published by Wall Street Journal editor Charles Dow in 1896 to track stock prices and serve as an indicator of market optimism or pessimism. The name “Dow” comes from the Dowager Duchess of Devonshire, who was the inspiration for the index’s first logo design in 1896, which featured a duchess holding a scroll with the inscription: “Her Grace, the Marchioness of Granby.”
The Dow Jones Industrial Average has been calculated since October 1896 and includes only 30 stocks selected by editors at The Wall Street Journal based on their performance relative to other stocks over time. The number one place on the list is occupied by General Electric Company, which became part of IBM in November 2000 but remains on this list due to its historical significance as one of America’s largest companies.
How The Dow Jones Industrial Average Has Risen And Fallen Over Time?
The Dow Jones Industrial Average (INDEXDJX DJI) has risen and fallen over time. It’s always been a volatile index, but the biggest swings have occurred in recent years.
The Dow’s first real correction was in the wake of the September 11 terrorist attacks. The index fell 12% in just five months, and it took three years to return to its 2000 level.
The next big drop came in 2008, when Lehman Brothers collapsed and the financial crisis sent stocks tumbling. The Dow lost more than half its value between August 9 and October 7 alone.
But it bounced back quickly — thanks in part to Federal Reserve Chairman Ben Bernanke’s decision to lower interest rates as part of a response to the financial crisis. The Dow climbed steadily from there, reaching an all-time high on December 28, 2007 — just nine days after Bear Stearns failed and two days before Lehman Brothers went bankrupt.
The index then plunged by nearly 50% over the next year-and-a-half before recovering again over the past few months. In total, those two major declines account for about two-thirds of all movement over those 30 years — or seven out of every 10 upswings and downswings.
Final Thoughts
The overall progress of the INDEXDJX DJI is a benchmark for how well America’s largest companies are doing, and how their stock market performance compares to other markets around the world. If a company’s stock price drops significantly on the NYSE, it is usually an indicator that something has happened to reduce confidence in the firm and its central operations. This change may prompt investors to sell off stocks, which lowers the share prices of all companies in a specific index (like DJI). Needless to say, there’s no way around market forces like this — investors take their cues from real-world events and make their decisions based on them.
