Dow-Jones Index
1. The Dow Jones index is an arithmetic average stock price index.
Dow Jones index is the oldest stock index in the world, and its full name is average stock price index. Dow Jones index, also known as SUS30, is composed of four stock price average indexes, which are compiled for some representative companies listed on the new york Stock Exchange.
Heavyweight representatives: Nike, Kraft, Boeing, Citigroup, DuPont, General Electric, Intel, Johnson & Johnson, Coca-Cola, JPMorgan Chase, Microsoft, McDonald's, Goldman Sachs, Apple, Procter & Gamble, Wal-Mart, etc.
2. The important position of Dow Jones index
The Dow Jones index usually refers to the Dow Jones Industrial Average, which is a representative and widely used stock price index and the most influential and authoritative stock price index in the world at present.
The Dow Jones average price index of 30 industrial stocks came on May 26th, 1896. At present, the Dow Jones Industrial Average is maintained by the editorial department of the Wall Street Journal. The selection criteria of its constituent stocks include sustainable development, large scale, outstanding reputation and strong industry representation, which are sought after by most investors.
At present, 30 constituent stocks in the Dow Jones T-share average index are representatives of blue-chip stocks in the United States. The subtle change of this mysterious index has brought panic or ecstasy to hundreds of millions of people. It is no longer an ordinary financial indicator, but a code name of the world financial culture.
3. The reason why the Dow Jones index is important.
(1) The stocks selected by the Dow Jones Stock Price Average Index are representative, and the issuing companies of these stocks are well-known companies with important influence in the industry. Their share prices have attracted the attention of the world stock market, and investors from all countries attach great importance to them.
In order to maintain this feature, Dow Jones often adjusts the stocks selected by its stock price average index, and replaces those stocks that lose their representativeness with dynamic and more representative company stocks.
(2) The Wall Street Journal is the news media that publishes the Dow Jones stock price average index, and it is the most influential newspaper in the world financial circle. During the business hours of the new york Stock Exchange, the Dow Jones average stock price index is published every half hour.
(3) This average stock price index has never stopped since it was compiled, and it can be used to compare the stock market and economic development in different periods. It has become one of the most sensitive average stock price indexes reflecting the changes in the American stock market, and it is the main reference for observing market dynamics and engaging in stock investment.
4. Why is the Dow Jones index so important?
The Dow Jones index is the primary reference index of American financial performance, so regulators, investors and officials should pay more attention to the basic assets it represents. All its components are considered as blue chips, which protects it from small economic fluctuations and remains vulnerable to major commercial activities. From the perspective of foreign exchange,
Most components of the Dow Jones Industrial Average are heavily dependent on exports and overseas business, which means that the index is influenced by currency; The appreciation of the dollar is regarded as affecting the profitability of basic companies. On the contrary, the strong growth of the index is a sign of investor confidence and helps to support the dollar.
5. What factors will affect the Dow Jones index?
(1) Monetary policy and economic data release
The loose monetary policy of the Federal Reserve has brought about an increase in the supply of money and credit and measures to cut interest rates, which often helps the stock market to rise, and the Dow Jones index is no exception. In addition, the publication of economic data may have a great impact on trading decisions. In view of the fact that inflation will erode the profits of various industries, the release of inflation indicators may damage the valuation of the Dow.
(2) the performance of individual joint-stock companies
The company with the highest weight in the index is more capable of driving the index to fluctuate up and down than the small constituent stocks. For example, UnitedHealthGroup can lead the Dow Jones index up and down better than Apple, although the market value of the latter is about six times that of the former.
(3) Social and political events
Events such as the COVID-19 epidemic will hit market demand in one way or another. For example, the COVID-19 outbreak in 2020 put severe pressure on key industries such as aviation and banking, and the share prices of Boeing and JPMorgan Chase plummeted in March 2020.