This article is from PERL Mortgage
Everyone?s heard of The Dow ? the magical benchmark quoted every night on the evening news. It offers a broad measure of the American stock market and a thumbnail of our country?s financial health. But what is the Dow? And why is it important?
The Dow (or the Dow Jones Industrial Average) was created by Wall Street Journal editor and Dow Jones Company co-founder Charles Dow and his associate Edward Jones. It?s simply an average of the stock market indices of 30 large companies (such as Exxon, Cisco, Microsoft, McDonald?s and Disney).
Originally, Charles Dow compiled the index to show how certain large publicly traded companies behave on an average day. The performance of this index has become a major indicator of the American economy, and is influenced by domestic corporate and economic reports, and domestic and foreign political events.
When it was first published, the index stood at 40.94. The Dow reached its record on October 9, 2007 at 14,164.53 – and today hovers around 9200 (1500 points above recent lows). The word ?Industrial? is now only a historical reference, as most large companies in the past century dealt in heavy industry.
