A:

On Tuesday, May 19, 2015, the Dow Jones reached an all-time intraday high of 18,351.36, and the highest closing price thus far was recorded at 18,312.39.

Calculating the index became more accurate with the help of technology and electronic trading. For example, before 1992, the index high was calculated using the intraday trading highs of each component stock, even though the highs for all 30 companies were likely not reached at the same time. This is known as the Theoretical Dow Jones Index. In January 1992, the Dow Jones calculation was changed to record the value of the index at 10-second intervals throughout the day, giving a more realistic measure.

Though the method has changed some since the index was first calculated in May 1896, it is still followed as a broad indicator of the strength in the U.S. stock market. As the Dow Jones Industrial Average tracks 30 of the largest U.S. companies, these new highs signify to many investors strength in the markets but can cause fear for other investors who feel the markets cannot support such highs much longer. Since the index was first recorded 118 years ago at 40.94, it has a 3.5% annualized return, illustrating that, even if the Dow Jones sees a drop, there is growth for long-term investors.

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