NUST Business School
FIN-407 – Financial Institutions and Markets
Assignment 2: How the Dow Jones Industrial Average Index is Calculated
Submitted to;
Ms. Saadia Irfan
Submitted by;
Hoor Un Nisa Shaikh
Fatima Asif
BBA 2K14
Date: 15th October, 2017.
A Brief Overview
The Dow Jones Industrial Average is one of the most quoted stock market index over the world, with the fluctuations in the index corresponding to the changes in the stock market. Charles Dow was the founder of this index and at the time of commencement it encompassed 12 ‘’smokestack’’ companies, officially debuting on May 26, 1896 (the year it was published).
As of now the industrial portion has become what a historical tangent to the name as the current bundle
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Named after Dow and his associate, statistician Edward Jones, it is the second-oldest U.S. market index, the oldest being the Dow Jones Transportation Average (also created by Dow). The industrial average was first calculated on May 26, 1896. It is currently owned by S&P Dow Jones Indices, which is majority owned by S&P Global and it is the most notable of the Dow Averages, of which the first (non-industrial) was originally published on February 16, 1885. The index displays how 30 of the large publicly owned companies based in the United States have traded during a typical trading session in the stock …show more content…
In June 2009, additions and removals were made when computer networking-equipment maker Cisco Systems replaced financial firm Citigroup. All told, there were eight additions and eight deletions made to the Dow between 1999 and 2009. The additions were: American International Group, Pfizer, Verizon, the just-ousted Bank of America, Chevron, Kraft, Travelers, and Cisco.
Removals during the time: International Paper; General Motors, AT&T, Allied Chemical & Dye, Eastman Kodak, Altria, Citigroup, and American International. AIG was added in April 2004 and removed in September 2008.
In the most recent changes, tech giant Apple is joined the DJIA in 2015, replacing AT&T. The change was effective with the opening of trading on Thursday, March 19. The change was prompted by Visa's 4-for-1 stock split, which was scheduled to be effective at the same time. Apple's split brought the stock price down closer to the median price in the DJIA. The Visa split reduced the technology weight in the DJIA and made room for Apple. Among the then current DJIA constituents, AT&T had one of the lowest prices.
In June, Apple announced its 7-for-1 stock split. It has a market capitalization of approximately $736 billion, making it the largest publicly traded company in the world. AT&T has a market value of nearly $175 billion. Apple shares grew, while AT&T fell more than 1
companies such as Olympia & York, Algoma Steel, Grafton Fraser, Woodwards, Westar Mining, and Birks, to complete reorganizations. But the most well known companies were both Air Canada and Canadian Airlines.
Apple is a king in the technology world; poisoning every area of the industry that they have introduced a product too. They are slowly weeding their competition out. The only a company thrives in the thorn bush market is if they are in cahoots with apple. Apples co-founder Steve Jobs, started the company with all intention of dominating the market. The only obstacle for them is the Anti-trust law created ages ago. Apple, in their attempt to take the market over, has been racking up evidence against themselves. There reach has leaped boarders and even caught the attention of the European Union. Apple is pushing their boundaries and in the future will eventually cross the line in to monopolistic actions.
The Dow Theory was established from a series of Wall Street Journal editorials authored by Charles H. Dow from 1900 until the time of his death in 1902. Today, even after 110 years they remain the foundation of what we know today as technical analysis. Dow never published his complete theory, but several of his followers compiled his works and that has come to be known as "The Dow Theory”.
In 1982, merger with Conoco exhibited poor performance. DuPont also lowered debt ratio to 36% due to asset sales, but interest coverage lowered to 4.
This comparison between American Airlines (AA) and US Airways (AWE) starts from the year ending report in 2008 after AWE finally completed embedding America West into their operations in October, a process begun in 2005. Neither has taken part in any mergers or takeovers since then and, despite AWE briefly flirting with the idea of taking over United Airlines in 2008, merger and acquisition plans for both had been subordinate to recovering from the Global Financial Crisis (GFC).
DIFFERENTIATION- AT&T’s exclusive agreement to market and sell the iPhone with Apple Corporation has differentiated itself from its competitors. Utilization of its vast spectrum to offer video conferencing service (video share).
The events that unfolded on September 11th and the days that followed also profoundly effected the stock market. It is the purpose of this paper is to examine what happened to both the Dow Jones Industrial Average and the NASDAQ after September 11th and how it is similar to events such as the bombing of Pearl Harbor, the Oklahoma City bombing, and the Gulf War in terms of how the stock market experienced a blow and bounced back after a while.
Looking at both companies’ outstanding shares, Apple has more outstanding shares of common stock on the open market than Microsoft. We can assume that Apple increases its stock issuance of outstanding shares to reduce the stock price thus making Apple’s stocks affordable (Miller-Nobles, Mattison and Matsumura 669).
...that received the licensing felt that Apple was too restrictive on their agreements. Through the years, Apples big problem was not just selling the computers, but building them. In June of 1995, Apple had over one billion dollars worth of backorders, and did not have the materials to build them. On top of the current problems Apple was facing, Windows had released its latest version of its software, Window ‘95, which was too similar to the Mac and yet more simplistic. Pretty soon Spindler was asked to resign due to major losses the company faced when Apple had posted a loss of sixty-eight million dollars due to a misjudge of the market. Spindler was replaced by Gil Amelio, who was previously the president of the National Semiconductor. Through 1996 and part of 1997 Ameilo did his best to help Apple bring back is profit, but in the end his efforts were unsuccessful.
In 1926, they purchased a controlling interest in Safeway, which was their most paramount financial investment for the firm because it transformed a minuscule grocery store chain into the third most astronomically immense grocery store chain by the early 1930s (Edwin Perkins, 1999, p. 238). Furthermore Merrill, Lynch & Co. made prosperous investments in the companies’ early history. The company, founded themselves on five ethical concepts such as client focus, respect for the individual, teamwork, responsible citizenship, and integrity (Anne Szustek, 2014). Throughout the 1930s, Fenner & Beane was consistently the second most exceedingly immense securities firm in the U.S. the fused firm, which became the clear bellwether in securities brokerage in the U.S., was renamed Merrill Lynch, Perforate, Fenner & Beane (Wigmore, 1985, p.238). By March of 1958, the firm had become a Big Board member of the New York Stock
The history of apple is not shy of turbulence with large periods of its early stages met with instability and downturn. Apple Inc. was founded by Steve Jobs and Steve Wozniak and was established on April 1, 1976 and incorporated the company on January 3rd 1977. The first two decades of its inception Apple was predominately in the business of manufacturing personal computers however as alluded to it faced rocky sales and low market shares during the 90’s. Steve Jobs, one of the original founders of the enterprise who had been dismissed in the mid 80’s following differences in vision for the companies future, returned to Apple in 1986 after Apple had acquired his then company NeXT (Apple Inc., 1...
Apple Inc. was established by Steve Jobs and Steve Wozniak on April 1, 1976 as a computer designer, developer and seller company. However, the company shifted its focus from only personal computer to include other consumer electronics such as portable media player and mobile phone in 2007. Apple Inc becomes one of the most popular makers in its field since it seems that its popularity has increased according to a report on www.statista.com that Apple Inc’s products sales was generally increasing throughout the first quarter of 2006 to the first quarter of 2014. On the one hand, it has increased its revenue from about 14 billion US dollars to more than 170 billion US dollars in 2013. All in all, the company is highly successful corresponding to its products’ development and their sales growth in world’s market.
The biggest stock exchanges are the New York Stock Exchange and NASDAQ. The New York Stock Exchange is a large building in Lower Manhattan that does auction-style trading with a lot of face to face interaction through specialists, brokers, and buyers. There are upper floors in this exchange on which specialists determine the prices of all the stocks. This information then travels to the brokers who work auctions face to face with buyers in order to sell the stocks. America’s biggest companies, like Coca-Cola and McDonald’s, sell their stocks through this exchange. NASDAQ is a virtual stock exchange with no physical building. This exchange was created during the 1970s but began thriving during the tech boom of the 1990s. The tech boom helped this exchange become the home of more technological companies li...
Apple is the world's second-largest information technology company by revenue and the world's third-largest mobile phone maker. “Fortune” magazine named Apple the most admired company in the United States in 2008, and in the world from 2008 to 2012.
In 1965 McDonald's went public with the company's first offering on the stock exchange. A hundred shares of stock costing $2,250 dollars that day would have multiplied into 74,360 shares today, worth over $2.8 million on December 31, 1998. In 1985, McDonald's was added to the 30-company Dow Jones Industrial Average.