What Is Dow Jones; A Plain Guide to Its History & Impact
If you’ve ever heard someone, say “The Dow is up today,” they’re talking about one of the most well-known names in finance the Dow Jones.
But what exactly is it? Is it a person, a company, or a stock index? In this article, we’ll break it all down in simple terms — from its history to how it works and why it matters to investors today.
- Dow Jones started as a financial news company in 1882.
- It was founded by Charles Dow, Edward Jones, and Charles Bergstresser.
- The company created the Dow Jones Industrial Average (DJIA), a stock market index.
- DJIA shows the average stock price of 30 major U.S. companies.
- Dow Jones & Co. is now owned by News Corp, while DJIA is managed by S&P Dow Jones Indices.
- You can’t buy the DJIA directly but can invest in it through ETFs.
What Is Dow Jones?
Dow Jones is mainly known in two ways:
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As a company that provides business and financial news.
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As the name behind the Dow Jones Industrial Average (DJIA), a major stock market index.
Dow Jones & Company was started in 1882 by Charles Dow, Edward Jones, and Charles Bergstresser. They wanted to help people understand financial news easily. One of their biggest achievements was launching The Wall Street Journal in 1889, which is still a top financial newspaper today.
Who Were Dow and Jones?
“Dow Jones” isn’t a single person. It comes from the last names of two of the founders — Charles Dow and Edward Jones. Dow was the one who came up with the idea of using a simple average of stock prices to show how the stock market was doing.
He believed that if both industrial and transportation stocks were rising, the whole market was likely doing well. This idea became known as Dow Theory.
What Is the Dow Jones Industrial Average (DJIA)?
The DJIA, or simply “the Dow,” is one of the most popular stock indexes in the world. It tracks the stock prices of 30 large U.S. companies such as:
- Apple
- Microsoft
- Boeing
- Coca-Cola
When it started in the 1800s, it only had 12 companies. Now, it tracks 30 major ones to give an overall picture of how big U.S. companies are performing in the stock market.
Dow Jones Today
Dow Jones & Company is now owned by News Corp (since 2007) and still runs big financial news platforms like:
- The Wall Street Journal
- MarketWatch
- Barron’s
However, the stock indexes that Dow originally created (like the DJIA) are now managed by S&P Dow Jones Indices, which is a separate company.
Can You Invest in the Dow?
You can’t buy the Dow Jones index directly, because it’s not a stock. But you can invest in ETFs (Exchange-Traded Funds) that follow the Dow’s performance. These let you earn from the rise or fall of the DJIA without owning the full list of stocks.
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Dow Jones started as a financial news company and ended up creating one of the most important tools for tracking the U.S. stock market the Dow Jones Industrial Average. While ownership and roles have shifted over the years, both the company and the index remain key players in the financial world.
Whether you're an investor or just curious, understanding Dow Jones gives you a clearer view of how markets move.