THE DOW JONES INDUSTRIAL AVER AGE
THE FIRST CENTURY: 1896-1996
There is no indication in his
HE DOW JONES Industrial Jones and Mr. Bergstresser conRonald Reagan
George Bush
Bill Clinton
Average traces more than tributed immensely to the envi- Journal editorials that Mr. Dow
6000
the development of Ameri- ronment in which Mr. Dow nur- foresaw the rise of the greatest
Netscape IPO
CD player debuts
Personal-computer use expands
House Speaker Wright resigns
industrial power in the world, and
can business from small, local tured his creations.
Orange County files for bankruptcy
The mechanics of the first stock the tall, taciturn journalist left
companies into global powerhousDebut of Walkman
AT&T broken up
Canadian free-trade pact
Keating convicted
es. It chronicles the evolution of average were dictated by the hardly any personal records that
5000
GATT approved
First space shuttle
AIDS virus identified
Bork rejected
necessity of computing it with might reveal his private thoughts.
investing as well.
Republicans gain control of Congress
Milken pleads guilty
But he was acutely conscious of
When Charles H. Dow first paper and pencil: Add up the
Junk-bond market collapses
Nafta passes
unveiled his industrial-stock aver- prices and divide by the number the rhythms of economic life
Beirut bombing
Iran rescue mission
RJR Nabisco buyout
4000
age on May 26, 1896, the stock of stocks. This application of because he lived when prosperity
Grenada invasion
S&L bailout begins
Blizzard hits East Coast
grade-school arithmetic, while was regularly cut short by recesmarket wasn’t highly regarded.
Iran hostage crisis ends
Clarence Thomas hearings
Boesky pleads guilty
Prudent investors bought creative, is hardly worthy of sions and panics.
2722.42
remembrance a centubonds, which paid
Insider-trading scandal breaks
Government shutdowns end
3000
Vince Foster suicide
ry later. But the very Business Cycles
predictable amounts
Junk-bond market begins
L.A.
riots
His prose, sometimes wooden,
idea of using an index
of interest and were
S&Ls deregulated
O.J. Simpson verdict
Tax
reform
to differentiate the was at its best in describing the
backed by machinOklahoma City bombing
Gramm-Rudman
U.S.S.R. breaks up
stock market’s long- cycles of business, to him as inexery, buildings and
ERA fails
2000
Los Angeles earthquake
U.S. becomes debtor nation
term trends from orable and unalterable as forces
other hard assets.
U.S. invades Panama
Reagan cuts taxes
Midwest floods
short-term fluctuations of nature. For instance, he wrote
Stocks, by con1987 Crash
San Francisco earthquake
Waco cult siege
in 1899 that when 75 million peodeserves a salute.
trast, were consid1738.74
World Trade Center bombing
Without the means ple shift “from feeling discourered very unsavory
Exxon Valdez spill
1000
Challenger disaster
for ordinary investors aged and doubtful to being confibecause daredevil
U.S. debt tops $4 trillion
to follow the market, dent and enterprising,” the effect
speculators, connivReagan shot
Deficit tops $300 billion
Berlin
Wall
falls
Iran-contra
hearings
Move
confrontation
Gulf
War
today’s age of financial “is stupendous in its results upon
ing Wall Street pool
0
democracy — in which all lines of business, including the
operators and corpo1993
1994
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1995
1996
1997
1998
millions of employees stock market.”
rate raiders did their
It has been that way ever since.
actively direct the
best to stage-manage
Charles H. Dow
investment of their As these charts demonstrate, the
prices. Stocks moved
John Kennedy
Lyndon Johnson
Richard Nixon
Gerald Ford
Jimmy Carter
own pension money stock market responded energetion dubious tips and
1200
1200
scurrilous gossip because solid and as a result are substantial cally to the flowering of AmeriMan on the Moon
First weather satellite
Telstar communications satellite First
home-use VCR
Apollo 13
corporate shareholders — would ca’s industrial might. The charts
information was hard to come by.
OPEC oil embargo U.S. and U.S.S.R. link in space
Nasdaq introduced
Apollo 1 disaster
reflect the daily closbe unimaginable.
Civil Rights Bill
Muhammad
Ali stripped of title
Nobel Prize for DNA discovery
Elvis Presley dies
ing values of the Dow
Following
the
Mainstream Investing
1000
1000
Clay wins title
Jones Industrial AverToday, stocks are routinely con- introduction of the
John Glenn orbit
Beatles visit U.S.
age from May 26, 1896,
sidered as investment vehicles, industrial average,
through May 24, 1996.
even by conservative investors. Mr. Dow modified
March on Washington
The line along the
Interest has widened far beyond his original index,
800
800
James Meredith enrolls
bottom and up the
the Wall Street cliques of the past begun 12 years earliPanama Canal treaties
Watts
riots
right side shows the
century to millions of everyday er, to create a 20J. Edgar Hoover dies
Camp David accords
industrial
average
working men and women who stock railroad averMalcolm X shot
Airlines deregulated
Nixon
devalues
dollar
600
600
from a centenary perturn to stocks to help them amass age. It was renamed
Chappaquiddick
Hoffa disappears
Gulf of Tonkin resolution
spective; because of
capital for their children’s college the transportation
Democratic
convention
in
Chicago
Bay of Pigs
Jonestown massacre
Nixon pardoned
the heights scaled in
tuition bills and their own retire- average in 1970. The
JFK assassinated
RFK shot
recent years the early
ment. Information to guide them Dow Jones Utilities
Nixon
resigns
Three Mile Island
Cuban Missile Crisis
400
400
Kent State
period appears relain their investment decisions is Average came along
Saturday night massacre
Civil Rights Act
OPEC hikes oil prices
Marilyn Monroe dies
tively flat. For a closer
abundantly available. The Dow in 1929, more than 25
Agnew resigns
Edward D. Jones
Dr. King shot
look at the average as
Jones Industrial Average played a years after Charles
Iran hostage crisis begins
Vietnam peace pacts
Kennedy confronts steel industry
it
was
seen
by
role in bringing about this Dow’s death at age
200
200
Watergate break-in
Tet Offensive
U.S. escalates aid to Vietnam
investors in each era, the century
51 in 1902.
tremendous change.
IRA tax shelters introduced
U.S. bombs Hanoi
At first, the industrial average is divided into five segments in
In 1896, even people on Wall
The Vietnam War
Street found it hard to tell from was published irregularly, but which the day-to-day moves are
daily publication in clear and events are highlighted.
the daily jumble of up0
0
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
The Wall Street Joura-quarter and downnal began on Oct. 7,
an-eighth
whether
1896. In 1916, the
stocks generally were
Franklin Roosevelt
Harry Truman
Dwight Eisenhower
average was expandrising, falling or tread900
ed to 20 stocks; the
ing water. Charles
900
Casablanca conference
number of stocks rose
Dow devised his stock
Computer mass-produced
ENIAC dedicated
First silicon chip
Color TV demonstrated
again in 1928 to 30,
average to make sense
Rationing in effect
Mass production of TV
First color TV broadcasts
First nuclear power plant
where it remains.
out of this confusion.
750
Allies invade Italy
750
Also in 1928, the
He began in 1884
Transistor invented
Highway Act
Sputnik I
editors of the Journal
with 11 stocks, most of
Berlin bombed
Salk polio vaccine
Rosa Parks incident
began calculating the
them railroads — the
Republicans gain control of Congress
D-Day
Nixon’s Checkers speech
average with a spefirst great national
600
600
Germans take Paris
Eisenhower heart attack Little Rock integrates
cial divisor other than
corporations. He comTaft-Hartley Act
Bretton Woods conference
the number of stocks,
pared his average to
First peacetime draft
Senate censures McCarthy
Huge snowstorm hits Northeast
placing sticks in beach Charles M. Bergstresser to avoid distortions
Dumbarton Oaks conference
Democrats regain control of Congress
Lend-Lease Act
when
constituent
sand to determine,
450
Alger Hiss affair
450
Allies land in Philippines
wave after successive wave, companies split their shares or
Supreme Court bans racial segregation
Embargo on Japan
whether the tide was coming in or when one stock was substituted
Yalta conference
Steelworkers strike
MacArthur fired
Cold War begins
Pearl Harbor
for another. Through habit, this
going out.
Hiroshima
300
If the average’s peaks and index was still identified as an
300
NATO established
Bataan falls
Marshall plan
troughs rose progressively higher, “average.”
Japan surrenders
Mr. Dow perceived well ahead
a bull market prevailed; if the
Battle of Midway
peaks and troughs dropped lower of the crowd that America’s
150
150
industrial sector was emerging as
and lower, a bear market was on.
This seems simplistic in these a distinct part of the economy and
World War II
The Korean War
days of myriad market indicators, that it would be of interest to
but late in the nineteenth century, investors, his readers.
0
0
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
Mr. Dow’s average was a power1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
ful new beacon that cut through
the fog. It provided a convenient
benchmark for comparing individWarren Harding
Calvin Coolidge
Herbert Hoover
Franklin Roosevelt
ual stocks to the course of the
450
450
market, for comparing the market
Byrd at North Pole
Times Square zipper sign
381.17
First
supermarket
War
of
the
Worlds
broadcast
with other economic indicators, or
simply for conversation at the corEmpire State Building opens
First rocket
375
375
First color movies
ner of Wall and Broad Streets
Photocopier demonstrated
Lindbergh baby kidnapped
about the market’s direction.
The stock average was just one
Prohibition repealed
Hindenburg crashes
Automatic bread-slicer invented
Smoot-Hawley tariff
expression of the mission Mr.
Prohibition begins
SEC created
300
300
Dow and his partners, Edward D.
Bank of the United States fails
First “talkie”
Jones and Charles M. BergstressWomen’s suffrage amendment Scopes “monkey” trial
Social Security Act
er, set for themselves in founding
Lindbergh flight
FDR closes banks
Bank Panic
Neutrality Act revised
Dow Jones & Company in 1881: to
225
225
First national radio broadcast
Minimum-wage
law
enlighten investors and business
Gold standard dropped
First public demonstration of TV
people with accurate, factual
1929 Crash
Mass production of radio
information, speedily delivered.
Congress passes New Deal
198.69
By tending resolutely to this
150
150
Teapot Dome scandal begins
purpose, the fledgling company
built a reputation for integrity.
41.22
Though they had nothing to do
75
75
World War II begins
with the averages directly, Mr.
T
6000
5000
4000
3000
2000
1000
0
1999
6000
5000
4000
The Great Depression
0
Democrat
Republican
Grover Cleveland
Recession
William McKinley
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930
1931
William Howard Taft
Theodore Roosevelt
3000
1932
1933
1934
1935
1936
1937
1939
Woodrow Wilson
150
150
Plessy v. Ferguson
Trans-Atlantic wireless transmission
Model T Ford
U.S. Steel formed
Peary reaches North Pole
Wrights’ first flight
Rural free delivery of mail
First subway
75
First auto show
Pure Food and Drug Act
125
Influenza epidemic
Federal Reserve established
First moving auto-assembly line
Panama Canal treaty
Gold standard confirmed
Prohibition amendment
Panama Canal opens
Klondike gold rush
100
Mass production of phonograph
Court dissolves Standard Oil
Motion pictures become popular
Cross of Gold speech
125
100
Rich Man’s Panic
Panic of 1907
Titanic sinks
Bolshevik revolution
Market closed
Income Tax amendment
San Francisco earthquake
25
Lusitania torpedoed
Senate rejects Versailles Treaty
1897
1898
1899
1900
25
World War I
Spanish-American War
1896
50
First airmail
McKinley assassinated
1895
2000
75
Tariffs raised
50
0
1938
0
1901
1902
1903
1904
1905
1906
1907
1908
1909
1910
1911
1912
1913
1914
1915
1916
1917
1918
1919
0
1000
0
1900
1910
1920
1930
CELEBRATING THE EVOLUTION OF INVESTING
Design: Karl Hartig
Research: Scott Bomboy
Illustrations: William M. Hallinan
1940
1950
1960
1970
1980
1990
2000
DOW JONES & COMPANY, INC.
© 1996 Dow Jones & Company, Inc. All Rights Reserved. The Dow Jones Industrial Average and The Dow Jones Averages are trademarks of Dow Jones & Company, Inc.