http://kimblecharting.tumblr.com/post/101840666496/this-100-year-dow-jones-industrials-chart-is
Showing posts with label Djia. Show all posts
Showing posts with label Djia. Show all posts
Sunday, 28 February 2016
100 year Dow Jones Industrial Chart
http://kimblecharting.tumblr.com/post/101840666496/this-100-year-dow-jones-industrials-chart-is
Wednesday, 6 March 2013
Dow Hits All-Time High: What’s Next?
Dow Jones Industrial Average (^DJI) burst higher in early trading today, eclipsing the previous closing high of 14,164 set on October 9, 2007. As it stands, the DJIA is also trading above the record intraday high of 14,198.
These breakouts have the ability to run for a while and don't necessarily trigger an instant sell-0ff.
For now, the new record will usher in a moment of euphoria, a brief round of hand shakes, and a boatload of analysis as to which stocks and sectors will lead the way now and how much further this four-year old bull run can go.
http://finance.yahoo.com/blogs/breakout/dow-hits-time-high-next-lofty-stock-market-161851791.html
Friday, 21 September 2012
Saturday, 23 June 2012
Dow Jones History — Tracing the Origins of this Popular Index
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?
The Dow Jones Industrial Average (DJIA), more commonly known as theDow, is a stock market index created by Charles Dow and Edward Jones way back in 1896. Today, the Dow Jones & Company owns this index. Dow Jones & Company is in the publishing and financial information business. Among other publications, they own the Wall Street Journal and Barron's weekly magazine.
Today, the DJIA is made up of 30 large, publicly owned companies based in the United States. The index reflects how the stock price of these 30 companies perform during the trading day.
Dow Jones History
The Early years
Charles Dow, a journalist, and his partner, Edward Jones, a statistician, founded the Dow on May 26, 1896. About twelve years earlier, Charles Dow had created the Dow Jones Transportation Average, consisting entirely of railroad stocks. At that time, the railroad industry was the main industry in the United States.
However, Dow realized that industrial stocks were becoming a small but growing part of the market. This drove the creation of the DJIA.
There were a total of 12 companies in the original index. As listed byWikipedia, these are:
- 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 DJIA didn't gain much popularity outside the confines of Wall Street in its first fifteen years. Why? Primarily because in 1896, investing in the stock market was considered highly speculative. Few people ventured beyond bonds and railroad companies when it came to investing.
The result? Not much attention being paid to an index that tracked stocks.
The Middle Years
Attitudes toward stock investing changed drastically by the time the 1920s rolled around. The average citizen was now investing in stocks. The result?
The Dow climbed from its modest range in the 100s to a whopping 400!
But this didn't last long. The crash of 1929 put a hard ceiling on this number. For the next 25 years the Dow stayed below 400 owing largely to the economic turbulence from both the 1929 crash and World War II.
1950 - 1999
The 1950s saw a meteoric rise in the Dow .... almost 250%. The 60s and 70s didn't see anything as dramatic. It wasn't until the 1980s that the Dow charged ahead into unprecedented heights, a pivotal moment in the Dow Jones history. The 80s and 90s were by far the most prosperous years for the stock market as a whole ... and the Dow rose an astounding 228% during the 80s and 317% during the 90s.
2000 - current
The dotcom crash in early 2000 sent the Dow spiraling downwards. The World Trade Center attacks made the slide even worse. It wasn't until 2003 that the Dow climbed past the 10,000 mark again.
Oct 9, 2007 saw the Dow at its highest point ever.... 14,164.This was an important milestone and it also marked the end of the longest ever US bull market.
The economy in the US and around the world started melting down in 2008. The next couple of years saw sharp swings in the Dow with the overall trend being downward. The Dow teetered up and down the psychological 10,000 point mark. 2010 ended with the Dow at 11,577.51.
How is the Dow Calculated?
A discussion on the Dow Jones history wouldn't be complete without answering this question.
Quite amazingly, the calculation for the Dow has remained almost the same since its inception.
First, you add the prices of the 30 companies that make up the Dow ... the price is picked from the primary exchange the stock is traded on.
Next, you divide this number by a what is called a divisor. This divisor is not simply the number of companies making up the Dow. It's an adjusted value designed to keep the index consistent through stock splits, dividend distributions, etc.
So, for instance, a 3:1 stock split on any of the component companies would triple the number of existing stocks, while the price would tend to drop by a third. The adjusted divisor ensures that this sharp drop in price doesn't plunge the index down.
The formula for the more mathematically curious is:
Dt+1 = Dt * Σ Ca t /Σ Ct
Where
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
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
In summary, we looked at what the Dow is, traced the Dow Jones history, and peeked into how the index is actually calculated.
The Dow is indeed the defacto bell-weather of the stock market and is valuable in assessing the overall strength of the market.
Wednesday, 29 February 2012
Dow Closes Above 13,000; First Time Since 2008
By CHRISTINE HAUSER
Published: February 28, 2012
The index, which tracks 30 of the biggest companies on Wall Street, last surpassed the milestone mark in a closing on May 19, 2008, when it ended trading at 13,028.16.
February has been a good month for the Dow Jones industrial average as it trades at levels not seen since the 2008-9 financial crisis. And after several narrow misses, it mustered enough momentum to pull itself firmly across the 13,000 threshold on Tuesday and stay there through the close.
As it did twice last week and on Monday, the Dow poked through the 13,000 level in intraday trading on Tuesday but then dropped back down toward the end of the day before a final surge that pushed it up to about 13,005.
It was a day marked by a handful of economic reports that were generally positive. The Conference Board’s measure of consumer confidence registered a 12-month high of 70.8 this month, a reflection presumably of continued improvement in labor market conditions, economists from Capital Economics said in a research note. Home prices, however, have fallen, with the 20-city Standard & Poor’s/Case-Shiller index declining 4 percent in December year-over-year. Durable goods orders fell 4 percent in January, but aircraft orders accounted for much of the drag.
The Dow is up nearly 3 percent for the month. Analysts said that the gains reflected the culmination of a generally upward trend in stocks since the beginning of the year. But they were also quick to point out that it said more about improving sentiment in the financial markets and the performance of individual companies than about a rebound in the economy since the recession ended in mid-2009.
“Thirteen thousand is not so very important technically as it is emotionally, simply because it is not 12,000,” Dan McMahon, the head of equity trading at Raymond James & Associates, said earlier Tuesday. “It is on the way to 14,000. It is kind of a landmark on the way.”
“The market has rallied significantly since the October lows and everything seems to be trending in the right direction,” Mr. McMahon added. “We are waiting for the next catalyst.”
Mr. McMahon said a better barometer for the market in general was the Standard & Poor’s 500-stock index, which measures the broader market, and has already hit its own precrisis levels. It closed Friday at its highest level since June 2008. Other broader measures of the market, such as the Russell 50, which includes the largest capitalization stocks, have already recovered as well.
“The stock market has been going up pretty consistently since October,” Dan Greenhaus, the chief global strategist at BTIG.
The Dow hit a 52-week low of 10,655.30 on Oct. 3. All 30 companies have risen since then, but about a third are responsible for most of the gains in the index, based on how they are weighted. The top contributor was Caterpillar, a stock that reflects the ups and downs in the economy, particularly in construction. It has accounted for more than 343 points in the index rise since the October trough. IBM and Exxon, helped by a rise in oil prices, each also accounted for more than 100 points, as did McDonald’s.
“It takes just a couple names to get it going in one direction or the other,” said Owen Fitzpatrick, head of U.S. equity strategy for DWS. Mr. Fitzpatrick said, in general, some of the issues that propelled the sell-off of last summer have eased, such as the concerns that the United States would follow Europe into a recession.
Future catalysts include strong gross domestic product data, or other signs the economy is stable, Mr. McMahon said.
Mr. Greenhaus said the closing threshold for the Dow “technically means nothing” when seen in the context of the wider, uneven economic recovery.
“People who hung in there have now seen their investment return to pre-crisis levels,” he said in a recent interview. But he added: “People are still going to say ‘I still don’t have a job.’”
Since the financial crisis companies have achieved good results with cost-cutting and hoarding cash. Some, like McDonald’s, have reoriented their approach to the tighter economy.
McDonald’s, one of the Top 10 contributors to the Dow’s strong rise since October, is now up more than 60 percent since before the financial crisis. Sara Senatore, a senior research analyst at Sanford C. Bernstein & Co., Inc. said many fast-food and casual restaurants have done well during the economic downturn, but McDonald’s also has a global footprint with growth in other economies that has helped it to do well. In addition, it has done an “excellent job” innovating and re-imaging, with new beverages and Wi-Fi in some outlets that allowed it to persist when the economy improved.
“You could make the case people traded down during the recession and haven’t traded back out, or up, as much as you might have thought,” she said
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