Before we dive into the understanding of Dow Jones Industrial Average or DJIA, let me tell You first that DJIA is the second oldest index in the USA Stock Market. The first index formed in the USA was the Dow Jones Transportation Average.
The Dow Jones index was created on 26 May in the year 1896 by Charles H. Dow and Edward Jones. At the beginning, it had only 12 companies.
Whatever we call it the Dow, Dow Jones, DJIA, DJI, US30 or Dow Jones Industrial Average index; all carry the same meaning.
Dow and Dow futures are different altogether.
The Dow is very popular index not only in the US Market, but all over the world.
What is Dow Jones Industrial Average (DJIA)?
Dow Jones Industrial Average (DJIA) is a price weighted average index of 30 blue chip companies listed in the NYSE and Nasdaq Stock Exchange in the USA Stock Market.
NYSE is the short form of New York Stock Exchange.
Nasdaq is the short form of National Association of Securities Dealers Automation Quotations.
These 30 companies are picked from NYSE and Nasdaq on the basis of performance of these stocks. The Dow does not includes transportation stocks and utility based companies.
Dow Jones Price Calculation
As the Dow Jones is a price weighted index. So, no importance is given to the market cap of individual shares. A Stock with a higher share price carry the higher weights in the index.
Formula for calculating Dow Jones Price is:
Dow Jones Index Price = Sum of Share Prices of 30 Blue Chip Companies / Dow Divisor
DJIA = Σp / d
At First, all the share prices of 30 companies are added. Then it is divided by Dow Divisor.
It is not calculated by a simple arithmetic average dividing the sum by 30.
It is divided by a special divisor known as Dow Divisor, Which is regularly adjusted for spinoffs in the company, stock splits and any dividend paid.
Current Dow divisor as on July 7. 2021 is 0.15188516925198. (Source).
Dow 30 Stocks List 2021
Dow Jones Industrial Average has 30 components stocks.
- 3M Company
- American Express Company
- Amgen Inc.
- Apple Inc.
- Boeing Company (The)
- Caterpillar, Inc.
- Chevron Corporation
- Cisco Systems, Inc.
- Dow, Inc.
- Goldman Sachs Group, Inc (The)
- Home Depot Inc. (The)
- Honeywell International, Inc.
- International Business Machines
- Intel Corporation
- Johnson & Johnson
- JP Morgan Chase & Co.
- McDonald’s Corporation
- Merck & Company, Inc.
- Microsoft Corporation
- Nike, Inc.
- Procter & Gamble Compnay (The)
- Salesforce.com, Inc.
- The Travelers Companies, Inc.
- UnitedHealth Group Incorporated
- Verizon Communications Inc.
- Visa Inc.
- Walgreens Boots Alliance, Inc.
- Walmart Inc.
- Walt Disney Company (The)
- Coca-Cola Company
Dow Jones Highs & Lows 2021
Dow Jones Industrial Average 52 week high is 35509 and 52 week low is 26537. It’s 52 week range is almost 9000 points.
Dow Jones all time low was 41.22 on July 8, 1932 .
Dow Jones Opening and Closing Time
Dow Jones is open from Monday to Friday from 9:30 a.m. to 4 p.m. except on trading holidays in the US Stock Market. (Stock Market Timings – NYSE & Nasdaq). Stock Market in USA opens for 6 hours and 30 minutes.
(Dow as per Indian timings Opening Time – 6:30 p.m. and Closing Time 1 a.m.)
(Dow as per London timings Opening Time – 2:30 p.m. and Closing Time 9 p.m.)
Note: Dow Futures remains open for longer duration.