The Dow Jones Industrial Average (DJIA) was first published on May 26, 1896 by financial reporters Charles Dow and Edward Jones. At that time, the index followed 12 companies that represented the largest in each sector of the U.S. stock market. The first published value of the Dow Jones was 40.94, which was calculated by taking the average market price for the 12 companies.

The index was a way for Dow and Jones to report the overall health of the stock market to investors. They had been working together through their company Dow, Jones & Co. since 1882, publishing a daily financial newsletter called the Customer's Afternoon Letter that gave readers a recap of the day's stock prices and news. Later, the company published The Wall Street Journal. At the time, investors had little access to truthful and unbiased information about company financials. Companies often withheld certain information or otherwise skewed information, leaving skeptical and timid investors. The Dow Jones Industrial Average was, therefore, necessary to build rapport for the stock market with investors.

The 12 original companies that represented every segment of the market at the time, except railroads and transportation, were: American Cotton Oil, American Sugar, American Tobacco, Chicago Gas, Distilling & Cattle Feeding, General Electric, Laclede Gas, National Lead, North American, Tennessee Coal Iron & RR, U.S. Leather and United States Rubber. General Electric is the only company in existence in its original form, while the others were acquired, closed or merged with other companies. Some of them are part of companies known in modern society. As the economy changed, so did the index, expanding in 1929 to include 30 companies.

  1. When was the Dow Jones Industrial Average first calculated?

    Charles Henry Dow was born on a farm in Connecticut on November 6, 1851. Farming didn't suit Charles Dow, however, so he ... Read Answer >>
  2. How do you compare the Dow Jones Industrial Average (DJIA) and the Toronto Stock ...

    See how the Dow Jones Industrial Average and TSX Composite move according to factors in their respective countries and from ... Read Answer >>
  3. Where can I find all of the stocks in the Dow Jones Industrial Average?

    The Historical Components List is the best place to learn about all 30 stocks in the Dow Jones Industrial Average. Read Answer >>
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