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How Does the Dow Jones Work
How Does the Dow Jones Work as a Player You must Know this
The Dow Jones Industrial Average (DJIA), is the top 30 Blue Chip whose performance is averaged each day of trading on the market form an index for evaluation. The components of the Dow Jones Industrial Average reads like a who is who in the market.
Currently, the top 30 quality s are doing quite well on the market. Due to the small number of s that make up the DJIA all it takes it a few of the s to take a dive and the overall average can take a dip. It is good to analyze the sectors that make up the components of the Dow Jones Industrial Average.
Direct consumer contact s in Dow Jones Industrial Average:
It is no surprise to most people that Wal-Mart Stores Inc is a component of the Dow Jones Industrial Average. Over the past three years the price of Wal-Mart had a price adjustment due to various management decisions. The $52 to $58 per share days of 2005 has seen a drop to $43 in 2007. This is expected to reach the $52 range again in the foreseeable future.
Another solid past performer Home Depot is trying to make a rebound from concerns about the housing market. Recently, Home Depot has seen some return to the range where it should be trading. It closed recently in the $38 range and should see some improvements to the mid $40 range.
McDonald's Company is also on the road to recovery after a slump in 2005. Their healthy diet adjustments have improved the overall out look on the stock. It is currently trading at the high $40 range and should easily go higher.
Walt Disney Company is a with many hats. It is known for resorts and films, but it has a huge international presence in all types of communications and media outlets. The product line is extensive. It has numerous media outlets, including but not limited to ESPN, The History Channel and television stations. The is a value currently selling in the range of $33.
Technology s in the Dow Jones Industrial Average:
Microsoft Corporation,United Technologies, Hewlett-Packard, Verizon Communications, International Business Machines, AT&T and Intel Corp. round out the influence of technology influence on
the Dow Jones Industrial Average. .
At this point an investor recognizes that if a sector is down for the day this will effect the overall Dow Jones Industrial average.
Large Multi-National s in the Dow Jones Industrial Average:
This category takes into account basic materials, drugs, machinery, autos and big cap companies that have a major influence on the Dow Jones Industrial Average.
The list of noteworthy s are: 3m Corp., Alcoa, Boeing Co., Caterpillar Co., E. I. Du pont de Nemours and Company, Exxon-Mobil Corp. General Electric Company, General Motors, Honeywell International Co., Johnson & Johnson, Merck & Company, Pfizer Inc., The Coca-Cola Company, and Procter & Gamble Company and lastly big tobacco, Altria Group Inc. .
It is hard to imagine a more stellar group of major players with such influence on the world economy and influence. A mixed bag indeed, but there common thread is there gargantuan influence on the Dow Jones Industrial Average. All of the low to medium priced s may be purchased individually or in a mutual fund or index fund.
Financial s in the Dow Jones Industrial Average:
This last group has a significant influence in the financial world. It may have some exposure to current angst in the market, but some are well positioned for any rocky road. The most stellar include, American International Group Inc. (AIG), American Express Company, JP Morgan & Chase & Company, and Citigroup Inc.
This groups influence on the overall Dow Jones Industrial Average is obvious. Some of the ripple effect of concerns about commercial paper and the real estate mortgage market may influence this groups effect. It will depend on whether the concerns should expand to the commercial real estate market and the extent of the defaults and foreclosures.
These are the top 30 components of the stock that make up the Dow Jones Industrial Average. As you can see the overall rise and fall of small percentages in this market indicator requires a closer look at the components and sectors. With this article, I hope it serve the purpose on how does the dow jones work
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