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| The Dow Jones Industrial Average (DJIA) is the oldest market
indicator in the United States and is comprised of 30 blue chip companies.
These 30 stocks represent about a quarter of the market value of all U.S.
stocks. For reference: as of June 30, 2004, there were 5,079 public companies
in the U.S. and their combined market capitalization was $13.7 trillion. The DJIA was developed in 1896 by Charles Dow, a co-founder of the Wall Street Journal, to provide market data to his readers. The price-weighted average was determined by taking the price of each company's stock and dividing by the number of companies. That approach is still used today, but the divisor is adjusted to smooth out the effects of stock splits and other corporate actions. The current divisor value is 0.13532775. The Dow Jones Industrial Average is maintained and reviewed by editors of The Wall Street Journal. |
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