News Corp. Considers Selling The Dow

This is a typical summer Friday afternoon type of post. The WSJ is reporting that News Corp. its parent is considering selling the stock indexing service it got as part of its acquisition of Dow Jones.

That service includes the Dow Jones Industrial Average which may be one of the most recognizable names in finance. The WSJ Deal Journal has the report and it includes this quick history of the Dow.

The Dow Jones Averages, a precursor to the DJIA, was created by Dow, a newspaperman from Providence, Rhode Island and son of a Connecticut farmer. It appeared for the first time in 1884 in the “Customers’ Afternoon Letter” that Dow Jones would ha n d deliver to clients from its basement office on Wall Street. At the time, it contained 11 stocks: nine railroads and two industrials.

The Dow Jones Industrial Average was officially launched in 1896 and contained industrial stocks only. Dow believed that there was a need to track stocks of industrial companies, then growing as part of the 19th century industrialization of America.

At first, the market wasn’t impressed with Dow’s creation. Investors were mostly interested in trading bonds, considered a much safer and more transparent bet.

Dow’s original DJIA consisted of only 12 stocks, of which only one, General Electric, has survived in today’s index.

On its first date published, May 26, 1896, the DJIA was worth $40.94. A couple of months later the DJIA had dropped to just $28.48, its lowest result ever. More companies were added in the 1920s to bring the total to 30 stocks , whose closing prices are averaged daily.

By July 2007 the index hit 14,000 .This afternoon it’s hovering at around 9500.

Truth be told, the only reason that I wrote this post was so I could use the picture of Charles Dow. His beard is truly one of the mose incredible I’ve ever seen. I have no idea how he made it through life with that appended to his face but all credit to him for having done so.

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