The highest close occurred the day before when the index closed at 39,908.00 points. The peak was led in part by optimism that the Federal Reserve could cut interest rates later this year. The largest single-day drop, percentage-wise, that the Dow has had occurred when the market crashed on Oct. 19, 1987, Black Monday.
What Do the Points in the Dow Jones Industrial Average Mean?
11The Dow reached an intraday high above 3,000 for the first time on Friday, July 13, 1990, before falling back below by the close. The average closed at 2,999.75 on Monday, July 16, 1990, and closed unchanged the following day;[17] however, it would take until April 17 of the next year for the Dow to finally close above 3,000. The DJIA is the second-oldest U.S. market index after the Dow Jones Transportation Average.
What Are the Drawbacks of the Dow Jones Industrial Average?
Share repurchases among the S&P 500 companies were 59% higher in the first quarter of 2014 than the first quarter in 2013. It was the largest amount since 2007, right before the stock market crashed. The Dow is not calculated using a weighted arithmetic average and does not represent its component companies’ market cap unlike the S&P 500. Rather, it reflects the sum of the price of one share of stock for all the components, divided by the divisor.
It hit a milestone on July 11, closing above 27,000, and then another on Nov. 15, closing above 28,000 (in the chart below, milestones are noted). The recession from 1973 to 1975 also led to a falloff for the Dow, which dropped 45% from its 1,051 peak in 1973 to just under 600 in 1974 (about 7,486 and 3,871 points, respectively, inflation-adjusted). The Dow also lost 26.5% during the Cuban missile crisis of 1962. 15This was the Dow’s close at the peak on October 9, 2007 before the financial crisis of 2007–2008. The S&P 500 and Nasdaq rebounded 1.1% and 1.3% on Friday, respectively, after both indexes posted their worst trading days since late April. Shares for most of the firms tracked by Dow rose in value on Friday, led by Intel (4.7%), IBM (2.8%) and Home Depot (2.6%), while shares for Walmart, Boeing and JPMorgan Chase fell slightly.
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Many critics argue that the Dow does not significantly represent the state of the U.S. economy as it consists of only 30 large-cap U.S. companies. They believe the number of companies is too small and it neglects companies of different sizes. Many critics believe the S&P 500 is a better representation of the economy as it includes significantly more companies, 500 versus 30.
But this robust start was not indicative of extreme volatility the index would face as the year progressed. First, the conflict between Russia and Ukraine saw gas prices spike sharply. At the same time, the strength in the U.S. labor market meant extremely competitive wages driving consumer demand. Both Top gene sequencing stocks for 2021 of those factors sent inflation in the U.S. soaring to record levels not seen in over 40 years.
The value of the index can also be calculated as the sum of the stock prices of the companies included in the index, divided by a factor, which is approximately 0.152 as of April 2024[update]. The factor is changed whenever a constituent company undergoes a stock split so that the value of the index is unaffected by the stock split. The Dow hit one milestone and had 26 closing records in 2016. Of the 26 records set that year, 17 occurred after the presidential election. The index’s 2016 closing high was 19,974.62, set on Dec. 20, 2016.
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5This was the Dow’s close at the peak of the 1920s bull market on Tuesday, September 3, 1929 before the stock market crash. This level would not be seen again until Tuesday, November 23, 1954, more than 25 years later. Stock market gains since the 2008 financial crisis were mediocre in volume. Only three days traded more than 200 million shares, a level similar to the late 1990s.
Erika Rasure is globally-recognized as a leading consumer economics subject matter expert, researcher, and educator. She is a financial therapist and transformational coach, with a special interest in helping women learn how to invest. The downturn reflected a 10-month recession, from July 1953 to May 1954, during the military demobilization following the Korean War. The Dow fell 17% in three months, from 2,864.60 on Aug. 2 to 2,365.10 on Oct. 11, 1990. A November streak occurred after Donald Trump’s presidential win on Nov. 8. Traders were confident in a business-friendly Republican president.
- But this robust start was not indicative of extreme volatility the index would face as the year progressed.
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- Despite all time highs early in the year, six of the 20 worst-one day point losses for the Dow occurred in 2022.
- When Trump began the transition process late on Nov. 23, 2020, stocks came roaring back.
The records set in the fall were the first ones since the Dow reached 26,616.71 on Jan. 26, 2018. After hitting the Jan. 26 peak, the Dow went into free fall, dropping 4% the next week. On Feb. 8, it entered a market correction when it fell 1,032.89 points to 23,860.46. The index is maintained by S&P Dow Jones Indices, an entity majority-owned by S&P Global. The ten components with the largest dividend yields are commonly referred to as the Dogs of the Dow. As with all stock prices, the prices of the constituent stocks and consequently the value of the index itself are affected by the performance of the respective companies as well as macroeconomic factors.
Uncertainty had been hanging over the markets because of the unprecedented refusal of then-President Donald Trump to concede the election to President-elect Biden. When Trump began the transition process late on Nov. 23, 2020, stocks came roaring back. The following are some milestones achieved by the Dow Jones Industrial Average. In parentheses, when helpful, we provide the Dow’s points as inflation-adjusted to Feb. 23, 2024, for a relative comparing to its record high. Journalist Charles Dow and his business partner, Edward Jones, established the Dow Jones Industrial Average in 1896 with 12 companies in the industrial sector. The number of companies included in the index increased to financial modeling for equity research 20 in 1916 and then to the current number, 30, in 1928.
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Previously, the Dow had fallen from 11,723 in January 2000 to 9,389 in March 2001, dropping 20% (from 20,520 to 16,434 points, inflation-adjusted). The bout of inflation that followed the COVID-19 pandemic led to another sharp sell-off in 2022. Between Jan. 7, 2022, and Sept. 30, 2022, the Dow trade bitcoin options and futures declined from 36,231.66 to 28,725.51. Perhaps the most infamous trough was during the Great Depression, in which the Dow lost about 90% of its value over three years. It hit a low of 41.22 in 1932 (about 908 points, inflation-adjusted).
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On Wednesday, panicky bankers withdrew $144 billion from money market funds, almost causing a collapse. The Dow gained 3,472.56 points during 2013, higher than any prior year on record. Various Registered Investment Company products (“Third Party Funds”) offered by third party fund families and investment companies are made available on the platform. Some of these Third Party Funds are offered through Titan Global Technologies LLC. Other Third Party Funds are offered to advisory clients by Titan.