For instance, a company may be removed from the index when its market capitalization drops because of financial distress. The DJIA is the second-oldest U.S. market index after the Dow Jones Transportation Average. The DJIA was designed to serve as a proxy for the health of the broader U.S. economy. Often referred to simply as the Dow, it is one of the most-watched stock market indexes in the world. While the Dow axi review includes a range of companies, all can be described as blue chip companies with consistently stable earnings.
What Does the Dow Jones Industrial Average Measure?
Shares of Gap Inc. (GAP) and Ross Stores (ROST) rose 13% and 2.2%, respectively, after the retailers released strong earnings reports. Intuit (INTU) shares fell 5.7% after the TurboTax and Credit Karma parent reported better-than-expected results but issued a disappointing outlook for the current quarter. In general, the Dow has underperformed during strong years in the stock market because the Dow has a higher focus on value and income, whereas the Nasdaq Composite focuses less on value and income. If the market is doing well, that probably means investors are willing to take on more risk, pay a higher price for growth, and gravitate toward Nasdaq stocks. On that day, it closed at 7,286.27, a 37.8% decline from its peak.
Historical Milestones
- The recession from 1973 to 1975 also led to a falloff for the Dow, which dropped 45% from its 1,051 peak in 1973 to just under 600 in 1974 (about 7,486 and 3,871 points, respectively, inflation-adjusted).
- The index had three nine-day runs, last occurring in 1955 (when there were four nine-day stretches).
- Stocks rallied in reaction to President-elect Donald Trump’s decisive victory early this month but gave back ground the following week before rebounding in recent sessions.
By early 2020, the Dow was nearing 30,000 — reaching a high of 29,551.42 on Feb. 12, 2020. Since the Dow tracks just 30 large-cap U.S. companies, How to buy hot coin some critics argue that it is too narrow to represent the state of the overall U.S. economy. Given its large-cap focus, the roster of companies included in the Dow fails to include companies of other sizes. Most market observers think the S&P 500 is a much better representation of the economy, as it includes 500 companies and draws more widely from different sectors. The longest bull market in history lasted about 11 years, starting in March 2009 and ending in February 2020.
Analysts had expected $459.8 million in profits on a slightly higher $5.14 billion in sales, according to estimates compiled by Visible Alpha. With this week’s gains, the Nasdaq is up 26.6% since the start of 2024, slightly outpacing the S&P 500’s 25.2% gain over the period. A bet on the Dow over the Nasdaq is a bet on proven strength and stability instead of potential growth. If the stock market cools off in 2024, or if valuations come down after this year’s epic run, or if some uncertain risk comes to light that scares the market, then chances are the Dow will outperform the Nasdaq. For example, if you’re looking for value and income over growth, you may not want to invest in a company like Salesforce at all.
Before that, it took more than 24 years for the index to double from 625 in the spring of 1959 to September 1983. These big, round numbers don’t mean much, but they do serve as a reminder that over time stock investments can pay off. The S&P 500 has returned about 10.6% annually Derivatives Essentials for the past 100 years, according to analysis from Trade That Swing. Our community is about connecting people through open and thoughtful conversations. We want our readers to share their views and exchange ideas and facts in a safe space.
Stock Market Crash
The index’s 2016 closing high was 19,974.62, set on Dec. 20, 2016. It hit two of them in the first few weeks in January, closing above 25,000 on Jan. 4. The index breached 26,000 on Jan. 17, then continued on to set 15 closing records in the rest of 2018.
Dow Jumps To New Record Closing High
The Dow Jones Industrial Average (DJIA) is a stock market index that tracks 30 large, publicly owned blue-chip companies trading on the New York Stock Exchange (NYSE) and Nasdaq. The Dow Jones is named after Charles Dow, who created the index in 1896 with his business partner, Edward Jones. Also referred to as the Dow 30, the index is considered a gauge of the broader U.S. economy. Gap (GAP) shares soared in premarket trading Friday after the apparel retailer reported stronger-than-expected third-quarter results and raised its sales outlook.
