Apparently, the Dow is taking this whole “115th birthday” thing a little too far, as traders across the world line up to give the index one birthday spanking after another. The index is down slightly today, allowing use of a pun that's been floating around the office all week.
Other than, say, a dinosaur hunting safari in Jurassic Park, can you think of a more interesting way to spend Oprah's millions than building a time machine and seeing, first-hand, what the world was like the day the Dow was born?
It's hard enough to imagine a world without internet access, let alone a world without a means to measure the performance of American companies. Yet, that's exactly where the on-the-cusp American economy was in 1896. The country, barely 100 years young, had just begun its move to supplant Great Britain as the dominant force in the world.
Since then, the Dow has tracked along with every major world event: World Wars, peace time expansions, revolutions and riot, booms and busts. Armed with only a simple history book and a Dow chart, most high school students could find and identify major world events on the chart, with the Dow moving up and down as the world ebbs and flows.
When it was first created, the Dow Jones Industrial Average was composed of a mere 12 stocks from some of America's top industries. Of those twelve stocks, only General Electric remains part of the Index. The other eleven stocks from the original index include:
American Cotton Oil Company Later became Bestfoods, and currently on the market as Unilever UL.
American Sugar Company American Sugar turned into Domino Sugar in 1900, and now operates as Domino Foods.
American TobaccoAmerican Tobacco was broken up by anti-trust regulators in 1911.
Chicago Gas Chicago Gas company was bought by Peoples Gas Light in 1897, and now operates as a subsidiary of Integrys Energy Group.
Distilling & Cattle Feeding Company
Laclede Gas Company
National Lead Company
North American Company This company used to exist as an electric utility holding company. It was broken up in 1946 by the SEC.
Tennessee Coal, Iron and Railroad This company was swallowed up by U.S. Steel in 1907, which itself was taken off the Index in 1991.
U.S. Leather Company
United States Rubber Company This company has had more names than P Diddy. It has also existed as Uniroyal, B.F. Goodrich, and Michelin, who purchased it in 1990.
Even today, 115 years later, the index has only grown to include 30 stocks. While some argue that this limited exposure to the market as a whole limit the Dow's usefulness as an indicator, it is still looked at by laymen and experts alike as the voice of the market. When the Dow is up, the market seems up, and vice versa.
One bit of trivia that highlights the differences in the economy today is that a tech stock made the index before a bank did. IBM
IBM was on the index in 1979. It took until 1991, when J.P. Morgan
JPM was added, to see a bank break through on to the index.
Happy birthday, Dow. Here's to another 115 years of success.
