The **Dow Jones Industrial Average (DJIA)**, commonly referred to as "the Dow," is one of the world's most recognized stock market indices. Established in **1896** by Charles Dow and Edward Jones, it initially tracked 12 industrial companies, reflecting the economic landscape of the time. Over the years, the DJIA has evolved to include **30 large, publicly traded U.S. companies**, representing various sectors such as finance, technology, and healthcare[1][4]. ### What Does Dow Jones Do? - **Market Benchmark**: The DJIA serves as a critical barometer for the U.S. stock market and economy, reflecting investor confidence and market trends[3][5]. - **Price-Weighted Index**: It is calculated by summing the stock prices of its components and dividing by a divisor, which adjusts for changes like stock splits[2][6]. ### History and Key Achievements - **Evolution**: Originally focused on industrial companies, the DJIA has expanded to include companies from diverse sectors, reflecting the changing U.S. economy[1][4]. - **Enduring Relevance**: Despite its age, the DJIA remains a vital indicator of market health and investor sentiment, influencing investment decisions globally[5]. ### Current Status - **Composition**: The DJIA includes prominent companies like Apple, Microsoft, and Coca-Cola, providing a snapshot of the U.S. business landscape[3][4]. - **Calculation**: The divisor is regularly updated to maintain continuity during stock splits or mergers, ensuring the index's integrity[6]. ### Notable Aspects - **Global Recognition**: The DJIA is widely followed and influences global financial markets, making it a cornerstone of financial news and analysis[1][2]. - **Comparison with Other Indices**: Unlike the S&P 500, which uses market capitalization for weighting, the DJIA is price-weighted, giving more influence to higher-priced stocks[5].