5th Nov 2009 by JonB
The Dow Jones Industrial Average is named after Charles Dow. Dow is the founder of the Wall Street journal, and in the late 19th century he was trying to get to his readers a quick summary of market activity. Eventually he devised the first of the averages by simply adding up the current share prices of 12 publicly traded companies and dividing them by 12.
This was known as the Dow Jones Industrial Average, and really was just an averaging of stock prices. Today the DJIA still exists and is widely relied upon as an indicator of broad market activity. Of course the formula for calculating the index have changed, but the concept tat Charles Dow invented remains in place.
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