Dow Jones Industrial Average What It Is And How It Reflects The Great Depression

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Dow Jones Industrial Average: What It Is and How It Reflects the Great Depression

Introduction

The Dow Jones Industrial Average (DJIA) is a stock market index that measures the performance of 30 large, publicly traded companies listed on stock exchanges in the United States. It is one of the most widely followed stock market indices in the world and is often used as a barometer of the overall health of the US economy. The DJIA was created by Charles Dow and Edward Jones in 1896 and is calculated by taking the sum of the stock prices of the 30 companies and dividing by a divisor that is adjusted to account for stock splits and other corporate actions.

The Great Depression and the DJIA

The Great Depression was a devastating worldwide financial meltdown that began in the United States in the 1930s. The DJIA plummeted during the Great Depression, losing nearly 90% of its value between 1929 and 1932. The index reached its lowest point on July 8, 1932, when it closed at 41.22. This was the lowest level the DJIA had ever reached and it would not reach its pre-Depression high again until 1954.

The Great Depression had a profound impact on the DJIA. The index lost nearly 90% of its value during the Great Depression, and it took more than two decades for the index to recover to its pre-Depression high. The Great Depression also led to a number of changes in the way the DJIA is calculated, including the addition of new companies to the index and the adjustment of the divisor to account for stock splits and other corporate actions.

Conclusion

The Dow Jones Industrial Average is a stock market index that measures the performance of 30 large, publicly traded companies listed on stock exchanges in the United States. The index was created in 1896 and is one of the most widely followed stock market indices in the world. The DJIA plummeted during the Great Depression, losing nearly 90% of its value between 1929 and 1932. The index reached its lowest point on July 8, 1932, when it closed at 41.22. This was the lowest level the DJIA had ever reached and it would not reach its pre-Depression high again until 1954. The Great Depression had a profound impact on the DJIA and led to a number of changes in the way the index is calculated.