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Quote of the Day
“The one fact pertaining to all conditions is that they will change.”
— Charles Dow
This Day in History marks the beginning of Dow’s most famous index – The Dow Jones Industrial Average.
May 26th – This Day in Stock Market History – Birth of the Dow Jones Industrial Average
May 26th, 1896 – The Dow Jones Industrial Average first appears, with a starting value of 40.94.
At the time, the index only contained 12 stocks:
- American Cotton Oil Company,
- American Sugar Refining Company,
- American Tobacco Company,
- Chicago Gas Company,
- Distilling & Cattle Feeding Company,
- General Electric, (removed from the Dow Jones Industrial Average in 2018)
- Laclede Gas Company,
- National Lead Company,
- North American Company,
- Tennessee Coal, Iron and Railroad Company
- United States Leather Company,
- United States Rubber Company, (Now part of Michelin)
The value of the index would be recalculated by Charles Dow each day with pencil and paper.
The index would almost close below this level during the depths of the Great Depression, when on July 8th, 1932, the Dow would close at 41.22.
May 26th, 1932 – In the largest change of the Dow Jones Industrial Average in history.
8 companies are swapped out of the index:
Removed from the index was Hudson Motor Car Company, National Cash Register Company, Texas Gulf Sulpher Company, United Aircraft and Transport Company, Paramount Publix Corp, Radio Corporation of America, Ligget and Myers Tobacco Company, and Mack Trucks, Inc.
Added to the index is American Tobacco Company, The Coca-Cola Company, Drug, Inc., International Shoe Co., IBM, Loew’s Theatres, Nash Motors Co., and Procter and Gamble.
The notable change occurred near the very bottom of the stock market’s decline in the great depression.
Best May 26th in Dow Jones Industrial Average History
1933 – Up 3.21%, 2.69 points
Worst May 26th in Dow Jones Industrial Average History
1938 – Down 2.10%, 2.32 points.
Read of the Day
Charles Dow created what is now the Wall Street Journal, which just celebrated its 130th year. To celebrate, the newspaper released a special edition of “130 Years of History”, an amazing look back through some of the Journal’s most infamous stories.
Check it out here: