Survival of the Fittest

Survival of the Fittest

The Evolution of the Dow Jones Industrial Average

February 2005 - December 2006

A measure of stock market performance, the Dow Jones Industrial Average is an important tool for assessing the overall health of the stock market – and allows investors to draw better conclusions about when to buy and sell by comparing past to present stock performance.

Conceived at the height of the Gilded Age, “The Dow” came to prominence during the Crash of 1929—by losing almost a third of its value in two days. Before that the stock market was widely considered a place for speculators and not something most Americans followed closely, if at all.

Today The Dow is no longer an average, and is no longer primarily industrial. But since the Depression, it has told a story of prosperity unprecedented in human history. The key to The Dow is its continuity through additions and deletions, splits and spin-offs.

Surprisingly, 11 of the 12 companies from the first Dow in 1896 are still around—some little changed, others with new names and businesses, others through successor companies. But like the average itself, the original “Dow Dozen” tell a story of continuity, ingenuity, and the resilience of industrial initiative.