Dow Jones Industrial Average Nearing 12,000
The Dow Jones Industrial Average (DJIA) is nearing 12,000 for the first time since June of 2008 according to this CNNMoney article. On a top level, all you need to know is that the higher the DJIA goes, the better our economy is performing. What, you want to know more? Good thing I’m here.
Okay, here’s the deal on a slightly deeper level: the Dow Jones Industrial Average measures the average performance of 30 large U.S.-based companies. Despite the name, these are not all “industrial” companies in any manufacturing sense. The companies have varied widely over time, but the current 30 include such diverse companies as Kraft, 3M, Coca-Cola, and Microsoft.
One little level deeper because I like you folks: The formula for figuring the average is to take add up the price of one share of stock in each of the thirty companies, then divide that sum by the “Dow Jones Industrial Average Divisor”. Calculating that divisor gets really complicated and this website does a good job with the details.
