When most people talk about how the stock market did, they're usually referring to the Dow Jones industrial average.
A mathematical formula based on the prices of 30 major companies, the Dow is the most widely watched barometer of U.S. stock performance.It dates back to July 3, 1884, when Charles Dow's stock average first appeared in Customer's Afternoon Letter, a forerunner of The Wall Street Journal. Dow, a founder of Dow Jones & Co., publisher of the Journal, included just 11 stocks in his initial index. Most were railroads.
Industrial companies were added to the list over the years. On Oct. 1, 1928, the first average of 30 stocks comparable to today's Dow Jones industrial average was published. It closed at 240.01.
The Dow's close Thursday of 4003.33, a gain of 30.28 points, represented its first-ever finish above 4000.
Stocks that comprise the Dow Jones average have changed over the years. Many aren't even industrial concerns.
The Wall Street Journal selects the 30 stocks, which now include Walt Disney Co., Sears, Roebuck and Co., AT&T Corp., Boeing Co., Coca-Cola Co., Exxon Corp., General Electric Co., International Business Machines Corp., McDonald's Corp. and Philip Morris Cos.
The average is calculated by adding up the closing prices of the 30 stocks on the New York Stock Exchange and dividing them by a changing number called the divisor, which accounts for stock splits. The divisor is currently at 0.37153418.