The Dow Jones Industrial Average (DJIA) is trading at an all-time high as of Feb. 14, 2020. The DJIA trades at 29,398. The DJIA tracks 30 well-known and large companies that trade on the New York Stock Exchange (NYSE) and NASDAQ. Rate cuts in 2019 and pending trade wars in early 2020 have helped boost the index. The DJIA has been in a bull market since 2009. 

Key Takeaways

  • The DJIA is currently trading at all-time highs, hitting 29,398 on Feb. 14, 2020. 
  • The biggest loss suffered by the DJIA was during the Great Depression, when it lost 90% of its value. 
  • However, its largest single-day drop happened during the Great Recession of 2008. 
  • The DJIA is in the longest bull market in history, ongoing since 2009. 

DJIA Consistently Hitting New Highs

The DJIA has consistently hit new highs over the last decade or so. In fact, the DJIA has been in a bull market since March 11, 2009. This has become the longest-running bull market in history and it’s still going. 

The DJIA hit several new highs in 2019, in part thanks to trade talks with China. The index hit 22 record closes in 2019. The DJIA has a storied history, introduced in its initial form in 1885. During the Great Depression, the Dow fell 90% in four years, hitting 41.22 in 1932. The DJIA lost 26.5% during the Cuban missile crisis of 1962. 

The 2008 Great Recession was the worst ever for the DJIA. The market fell over 50% in just a year-and-a-half, granted, not as bad as the 90% fall during the Great Depression. Yet, the largest single-day drop happened during 2008. On Sept. 29, 2008, the Dow fell over 777 points. 

During the 2001 recession, the DJIA fell from 11,723 in Jan. 2000 to 9,796 in March 2001, falling 17%. The recession from 1973 to 1975 was also especially troublesome for the DJIA, falling 45% from its 1,051 peaks in 1973 to just under 600 in 1974.

Technology and the DJIA 

Calculation of the index has become more accurate over the years thanks to 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.