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Dow Jones Transportation Average - started in 1884 as the Dow Jones Railroad Average
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What is Dow Jones index based upon?
This was a good question as it made me learn the answer myself! Here's the link from wikipedia: http://en.wikipedia.org/wiki/Dow_Jones_Industrial_Average And here's an excerpt explaining the Index. The Dow Jones Industrial Average (NYSE: DJI, also called the DJIA, Dow 30, or informally the Dow industrials, the Dow Jones or The Dow) is one of several stock market indices created by Wall Street Journal editor and Dow Jones & Company co-founder Charles Dow. Dow compiled the index as a way to gauge the performance of the industrial component of America's stock markets. It is the oldest continuing U.S. market index, aside from the Dow Jones Transportation Average, which Dow also created. Today, the average consists of 30 of the largest and most widely held public companies in the United States. The "industrial" portion of the name is largely historical—many of the 30 modern components have little to do with heavy industry. To compensate for the effects of stock splits and other adjustments, it is currently a scaled average, not the actual average of the prices of its component stocks—the sum of the component prices is divided by a divisor, which changes over time, to generate the value of the index.
How is the Dow Jones average calculated?
Since its creation in the late 1890s, the Dow Jones Industrial Average is one of the most storied, well-known and widely quoted measures of Stock Market performance there is. Despite its long history, how exactly the index's value is calculated remains a mystery to most even those who have been in the industry for years. Believe it or not, it's not as complicated as it sounds. The Dow Jones Industrial Average is a price-weighted index. That means that the price of a stock depends on how heavily it's weighted in the index. A stock priced at $100 carries twice the weight of a stock priced at $50. This differs from market cap-weighted indices like the S&P 500 where the largest companies like General Electric and Microsoft are given the greatest weight. In the Dow, a stock like Boeing priced at around $65 is weighted over twice as heavily as Microsoft (priced around $30) despite Microsoft being over five times larger than Boeing. The Dow contains a total of 30 stocks and the original index value was calculated by simply adding up the prices of each of the components and dividing that number by the number of stocks. Over time, the Dow Jones company realized that events like stock splits as well as adding and removing stocks from the index could potentially skew the continuity of the index's average. Thus, a divisor was created. This value gets adjusted whenever a stock's value is split (so that the Dow doesn't unfairly drop in value due to an accounting event) or when a stock is swapped out in the index (so that the original index value remains in tact taking into account a new stock price). Today, the sum of the individual component prices is then divided by the divisor number in order to arrive at the final Dow Jones Industrial Average value.
What are Points in stock market?
Also called "basis points," a point is 1/100th of a cent, or 1/100th of a percent. - The bond market is measured in basis points, not the stock market. Today, 10/19/2010, the Dow Jones Industrial average was down 165.07 points, or 1.48%. To understand what a point is, you need to know that the index is a weighted average of the stock prices contained within it. Not all stocks are worth the same amount, so they are given a weight, otherwise know as a "divisor" (the divisor changes daily to account for stock splits, mergers, etc). If you multiply the average price of the stocks in the DJIA by the divisor, you will get the value of the index in points. Now, the short version: 1 point is equal to $1. It would cost $165.07 less to buy one share of each stock in the DJIA at the close today than it cost yesterday for the same number of the same stocks.
How The Dow Jones Industrial Average Is Calculated?
The Dow Jones Industrial Average (NYSE: DJI, also called the DJIA, Dow 30, INDP, or informally the Dow Jones or The Dow) is one of several stock market indices, created by nineteenth-century Wall Street Journaleditor and Dow Jones & Company co-founder Charles Dow. It is an index that shows how certain stocks have traded. Dow compiled the index to gauge the performance of the industrial sector of the American stock market. It is the second-oldest U.S. market index, after the Dow Jones Transportation Average, which Dow also created. The average is computed from the stock prices of 30 of the largest and most widely held public companies in the United States. The "industrial" portion of the name is largely historical-many of the 30 modern components have little to do with traditional heavy industry. The average is price-weighted. To compensate for the effects of stock splits and other adjustments, it is currently a scaled average, not the actual average of the prices of its component stocks-the sum of the component prices is divided by a divisor, which changes whenever one of the component stocks has a stock split or stock dividend, to generate the value of the index. Since the divisor is currently less than one, the value of the index is higher than the sum of the component prices. To calculate the DJIA, the sum of the prices of all 30 stocks is divided by a divisor, the DJIA divisor. The divisor is adjusted in case of splits, spinoffs or similar structural changes, to ensure that such events do not in themselves alter the numerical value of the DJIA. The initial divisor was the number of component companies, so that the DJIA was at first a simple arithmetic average; the present divisor, after many adjustments, is less than one (meaning the index is actually larger than the sum of the prices of the components). That is: : where p are the prices of the component stocks and d is the Dow Divisor. Events like stock splits or changes in the list of the companies composing the index alter the sum of the component prices. In these cases, in order to avoid discontinuity in the index, the Dow divisor is updated so that the quotations right before and after the event coincide: :The current value of the DJIA Divisor is 0.1255527090. This value is regularly published in the Wall Street Journal and is available on-line at the Chicago Board of Trade's web site.
What is the current stock index for RSO?
The current Stock Report for RSO as of June 17, 2013 is a rate of 6.32, down by 0.01(0.16%). Market capacity is now measured at 664.43 Million at a range of 6.27-6.43 today.
How do say today you are the oldest you will ever be?
You can say, "Today you are the oldest you have ever been and the youngest you will ever be again."
What is the best stock right now?
This depends on your current asset allocation, risk tolerance, and investing horizon. Beginning investors would do best with low-cost index funds. It is impossible to answer this question with a singular answer, as the stock market is very volatile and changes every day. What might be a "good stock" today, could plummet tomorrow. The Motley Fool, www.fool.com, has great forums and articles for researching stocks. Many new investors start out by investing in index funds, which distribute your risk across the entire index of stocks.
What is the Dow Jones Industrial Average at this moment in time?
I’m sure you’ve heard of the Dow Jones Industrial Average (DJIA), or simply “the Dow”. It’s reported on the news every evening. The Dow was up or down today. What does that really mean? Sure, you know that it has something to do with the stock market, but beyond that you’re unclear, right? Don’t be discouraged. Most Americans couldn’t tell you much about the DJIA. The Dow Jones Industrial average is one of the oldest surviving and oft quoted stock market indices in the world. It was started in 1896 by Charles Dow. When it was started it tracked 12 stocks. Today it represents 30 stocks. Despite being used as a gauge of stock market performance by many I think there are a couple problems with the Dow. The first is that it is tiny. People often assume that the Dow represents the overall movements of the entire stock market. But it only represents the movements of 30 stocks. Compared to the over 4,000 actively traded stocks in the U.S. markets, the Dow is a gauge of very little indeed. Another problem with the DJIA is that it is a price-weighted index. That means that the index gives a larger weight to the underlying stock components with the higher stock prices. It does not assign weight to is components by how much of their industry they comprise or the market capitalization of the individual corporations, the way other more useful indices do. So the next time you hear about the Dow being up or down, don’t assume that the entire market is following suit. This tiny little index is an outdated gauge of 30 individual stocks. If you really want a broader picture of how the overall U.S. market is doing, I suggest looking at a better, more inclusive index like the Russell 3000 or the Wilshire 5000.
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