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The most recognized stock market indicator in the world is the Dow Jones industrial average. However, its usefulness as a benchmark index for the U. S. equity market has become questionable recently. Much of the debate on its viability focuses on changes in the average during the past year.
What to do? Ignore reference to the Dow Jones industrial average as a benchmark of the U. S. equity market when considering performance of the U. S. equity market. Better to use a more broadly based index, such as the S&P 500 index.
The Dow Jones Industrial Average is a price-weighted average of 30 blue-chip stocks that are generally the leaders in their industry
Originally posted by Mainer
reply to post by HunkaHunka
You must work for the Government: if you don't like the numbers coming out of a set index, just drop the index.
Originally posted by RRconservative
Actually things started going downhill when Democrats took over Congress in 2006.
We do not expect that this index will be disbanded. History might be enough to keep it alive. But there is money behind it too for Dow Jones, a unit of News Corp. McGraw Hill owns the S&P indexes. The first index we look at is the S&P 500 Index. The DJIA 30 is just no longer representative of “The Market” except for the fact that it goes down every day.
Originally posted by DaddyBare
Now the DOW's choices as best of the best are no longer valid. and need to be changed to keep being a bellwether of market trends..
what would I pick as a replacement?
GOOGLE INC-CL A 308.57
CME GROUP INC 182.45
AUTOZONE INC 152.76
MASTERCARD INC-A 142.44
As you can see there are lots of companies still making money but when the leaders in their industry change the DOW needs to replace the old with the new... DOW is a horrible indicator of general market conditions as it only shows what should be the top performers only those top companies have changed...