Before we start tracing the Dow Jones history let's first understand what exactly the Dow Jones is. Next, we'll take a look at how the Dow has performed since it first started. Finally, we'll conclude with understanding how the index is actually calculated.
What Exactly is the Dow Jones?
Dow Jones History
- American Cotton Oil Company ... now part of Unilever.
- American Sugar Company ... now Domino Foods, Inc.
- American Tobacco Company ... broken up in a 1911 antitrust case.
- Chicago Gas Company ... now an operating subsidiary of Integrys Energy Group.
- Distilling & Cattle Feeding Company ... now Millennium Chemicals.
- Laclede Gas Company ... still in operation as the Laclede Group, Inc., but removed from the Dow Jones Industrial Average in 1899.
- National Lead Company ... now NL Industries, removed from the Dow Jones Industrial Average in 1916.
- North American Company ... broken up by the U.S. Securities and Exchange Commission (SEC) in 1946.
- Tennessee Coal, Iron and Railroad Company ... bought by U.S. Steel in 1907. U.S. Steel was removed from the Dow Jones Industrial Average in 1991.
- U.S. Leather Company ... dissolved in 1952.
- United States Rubber Company ... changed its name to Uniroyal in 1961, merged with private B.F. Goodrich in 1986, bought by Michelin in 1990.
- General Electric (GE) ... an integral component of the Dow Jones history since it's the only company from the original 12 to still be part of the DJIA despite being removed twice.
The Middle Years
1950 - 1999
2000 - current
How is the Dow Calculated?
Dt+1 = Divisor to be effective on trading session t+1
Dt = Divisor on trading session t
Ca t = Components’ adjusted closing prices for stock dividends, splits, spin-offs and other applicable corporate actions on trading session t
Ct = Components’ closing prices on trading session t