Dow Jones Industrial Average (DJI): Comprehensive Guide

Overview

The Dow Jones Industrial Average (DJI) is a stock market index that tracks the performance of 30 of the largest and most widely traded publicly owned companies in the United States. It is one of the most well-known and widely followed stock market indices globally.

History

The DJI was created in 1896 by Charles Dow and Edward Jones, the founders of the Dow Jones & Company financial news agency. The index initially included 12 companies but has been expanded and modified over the years to include a more representative sample of the U.S. economy.

Current Constituents

The current constituents of the DJI are:

• 3M Company (MMM)
• American Express Company (AXP)
• Apple Inc. (AAPL)
• Boeing Company (BA)
• Caterpillar Inc. (CAT)
• Chevron Corporation (CVX)
• Cisco Systems, Inc. (CSCO)
• Coca-Cola Company (KO)
• Dow Inc. (DOW)
• DuPont de Nemours, Inc. (DD)
• Exxon Mobil Corporation (XOM)
• Goldman Sachs Group, Inc. (GS)
• Home Depot, Inc. (HD)
• Honeywell International Inc. (HON)
• IBM Corporation (IBM)
• Intel Corporation (INTC)
• Johnson & Johnson (JNJ)
• JPMorgan Chase & Co. (JPM)
• McDonald's Corporation (MCD)
• Merck & Co., Inc. (MRK)
• Microsoft Corporation (MSFT)
• Nike, Inc. (NKE)
• Procter & Gamble Company (PG)
• Salesforce, Inc. (CRM)
• The Travelers Companies, Inc. (TRV)
• UnitedHealth Group Inc. (UNH)
• Verizon Communications Inc. (VZ)
• Visa Inc. (V)
• Walmart Inc. (WMT)

Calculation

The DJI is calculated by summing the share prices of the 30 constituent companies and then dividing by a divisor. The divisor is adjusted whenever a new company is added or removed from the index or when a company issues a stock split.

Importance and Significance

The DJI is widely used as a barometer of the health of the U.S. stock market and the overall economy. It is closely watched by investors, analysts, and policymakers as a leading indicator of economic trends. Movements in the DJI can have a significant impact on investor sentiment and market activity.