Dow Jones, or more precisely, Dow Jones & Company, is one of the largest business and financial news companies in the world. While the Dow Jones Industrial Average tracks publicly owned corporations, Dow Jones & Company is not a public company itself.
- Dow Jones & Company is one of the largest business and financial news companies in the world.
- Dow Jones started the Dow Jones Industrial Average (DJIA) as well as many other indexes.
- The DJIA tracks publicly-owned corporations and is one of the most-watched stock indexes in the world.
- Dow Jones sold the DJIA and its other indexes to S&P Dow Jones Indices LLC, a joint venture between S&P Global and the CME Group.
How Dow Jones & Company Began
The firm was founded in 1882 by Charles Dow, Edward T. Jones, and Charles Bergstresser. In 1889, they founded The Wall Street Journal, which remains one of the world's most influential financial publications.
Dow was known for his ability to ethically explain complicated financial news to the public. He believed that investors needed a simple benchmark to indicate whether the stock market was on the rise or the decline. Dow chose several industrial-based stocks for the first index, and the first reported average was 40.94.
Dow Jones Industrial Average
It is easy to confuse Dow Jones with the Dow Jones Industrial Average (DJIA). Often referred to as "the Dow," the DJIA is one of the most-watched stock indexes in the world, containing companies such as Apple, Boeing, Microsoft, Coca-Cola, and Exxon.
The DJIA initially launched with just 12 companies that were based mostly in the industrial sectors. The companies operated in railroads, cotton, gas, sugar, tobacco, and oil. The performance of industrial companies is often seen as synonymous with that of the overall economy, making the DJIA a key measure of broader economic health. Although the economy's health is now tied to many additional sectors, the DJIA is still seen as a key barometer of the wellbeing of the U.S. economy.
Dow Jones (the company) owned the Dow Jones Industrial Average, as well as many other indexes that represent different sectors of the economy, including the oldest index, the Dow Jones Transportation Average, which tracks 20 transportation companies, including airlines and delivery services. Another major index is the Dow Jones Utility Average, which tracks 15 U.S. utility stocks.
In 2012, S&P Dow Jones Indices LLC bought the Dow Jones Indexes. S&P Dow Jones is a joint venture between controlling member S&P Global and the CME Group, which also owns the S&P 500 Index, among other indexes.
In the world of finance, you'll often hear people ask, "How did New York do today?" or "How did the market perform today?" In both cases, these people are likely referring to the DJIA as it is the most widely-used index, above both the S&P 500 Index, which tracks 500 stocks and the Nasdaq Composite Index, which includes more than 3,000 U.S. and international equities.