A History of the Dow
It took 88 years for the Dow Jones industrial average to cross the 1,000-point mark, but only 27 years from that milestone for the index to top 10,000. Highlights in the famous index’s history:
* November 1882: Charles Dow and Edward Jones form Dow Jones & Co.
* July 3, 1884: Dow Jones publishes its first average of 11 U.S. stocks--nine of them railroad issues--in the Customer’s Afternoon Letter, a forerunner of the Wall Street Journal.
* May 26, 1896: The first Dow industrial average is calculated, based on 12 stocks. The index’s first close: 40.94.
* Jan. 12, 1906: Dow closes above 100 for the first time, at 100.25.
* Oct. 1, 1928: Dow is expanded to 30 stocks. It closes at 240.01.
* Sept. 3, 1929: Reaches its closing peak for the 1920s bull market at 381.17.
* Oct. 28, 1929: Plummets 38.33 points, or nearly 13%, closing at 260.64 and heralding the Great Depression.
* Oct. 6, 1931: Soars 14.9% to 99.34, which even today ranks as the biggest one-day percentage gain.
* July 8, 1932: Reaches a Depression-era low of 41.22.
* March 12, 1956: Closes above 500 for the first time in the booming postwar economy.
* Nov. 14, 1972: Closes above 1,000 for the first time, at 1,003.16.
* Jan. 11, 1973: Peaks at 1,051.70, the last gasp of the “Nifty Fifty” blue-chip stocks before rocketing oil prices help trigger a massive recession.
* Dec. 6, 1974: Closes at a 12-year low of 577.60, ending the worst bear market since the 1930s.
* June 29, 1979: IBM replaces Chrysler and Merck replaces Esmark in the index.
* Aug. 12, 1982: Dow closes at 776.92, heralding the end of a long period of stagnation and the beginning of the great bull market of the 1980s.
* Aug. 30, 1982: American Express replaces Manville.
* Feb. 24, 1983: Dow tops 1,100.
* Oct. 30, 1985: Philip Morris replaces General Foods; McDonald’s replaces American Brands.
* Jan. 8, 1987: Dow breaks the 2,000 level, rising 8.30 points to 2,002.25.
* March 12, 1987: Coca-Cola replaces Owens-Illinois; Boeing replaces Inco.
* Aug. 25, 1987: Dow reaches its ‘80s bull market peak of 2,722.42, fueled by surging foreign investment in U.S. stocks, soaring corporate takeovers and strong consumer spending brought on by 1986 tax cuts.
* Oct. 19, 1987: Plunges 508 points to 1,738.74, a 22.6% drop that still ranks as the biggest one-day percentage loss, as investors flee stocks amid rising interest rates, talk of tax increases and heavy computerized selling.
* Jan. 2, 1990: Rises 56.95 points to 2,810.15, a record high for the first time since the 1987 plunge.
* Aug. 3, 1990: Falls 54.95 points to 2,809.65 after Iraq invades Kuwait, marking the start of the 1990s bear market.
* Oct. 11, 1990: Bottoms at 2,365.10.
* April 17, 1991: Breaks 3,000, rising 17.58 points to 3,004.46, as investors flock back to stocks on optimism about the recession’s end. Significant business news events of the year include the failure of Pan Am and BankAmerica’s acquisition of Security Pacific.
* Feb. 23, 1995: Crosses 4,000, rising 30.28 points to 4,003.33. Significant business news events of the year include Walt Disney’s agreement to buy Capital Cities/ABC for $19 billion and Westinghouse Electric’s plan to buy CBS for $5.4 billion.
* Nov. 21, 1995: Dow breaks 5,000 amid tumbling interest rates and soaring corporate profits.
* Oct. 14, 1996: Crosses 6,000 as merger mania booms. Significant business news events of the year include the $25-billion merger of Bell Atlantic and Nynex and Boeing’s plan to acquire McDonnell Douglas for $13.3 billion.
* Dec. 5, 1996: Federal Reserve Chairman Alan Greenspan questions whether investors could be caught up in “irrational exuberance” for stocks. Dow falls 55.16 points to 6,381.94.
* Feb. 13, 1997: Dow crosses 7,000, ending at 7,022.44, as small investors pour cash into stock mutual funds.
* March 17, 1997: Johnson & Johnson, Travelers Group, Hewlett-Packard and Wal-Mart are added to the index, as Bethlehem Steel, Westinghouse, Texaco and Woolworth are dropped.
* July 16, 1997: Dow crosses 8,000.
* Oct. 27, 1997: Falls 554.26 points, or 7.2%, to 7,161.15--still the biggest one-day point drop--as fears about the Asian economic crisis hit U.S. shores.
* March 6, 1998: Crosses 9,000 as corporate takeovers reach unprecedented levels, including AT&T;’s deal to buy Tele-Communications Inc. for $46.5 billion.
* Aug. 31, 1998: Plunges 512.61 points, or 6.4%, to 7,539.07 as Russia devalues its currency and fears of global depression resurge.
* March 29: Closes above 10,000 for first time.
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The Dow’s Ancestry
The original 12 stocks in the first Dow industrial average, created May 26, 1896:
* American Cotton Oil
* American Sugar
* American Tobacco
* Chicago Gas
* Distilling & Cattle Feeding
* General Electric
* Laclede Gas
* National Lead
* North American
* Tennessee Coal & Iron
* U.S. Leather
* U.S. Rubber
The original 30 stocks in the modern Dow average, which began Oct. 1, 1928:
* Allied Chemical
* American Can
* American Smelting
* American Sugar
* American Tobacco
* Atlantic Refining
* Bethlehem Steel
* Chrysler
* General Electric
* General Motors
* General Railway Signal
* Goodrich
* International Harvester
* International Nickel
* Mack Trucks
* Nash Motors
* North American
* Paramount Publix
* Postum
* Radio Corp.
* Sears Roebuck
* Standard Oil (N.J.)
* Texas Corp.
* Texas Gulf Sulphur
* Union Carbide
* U.S. Steel
* Victor Talking Machine
* Westinghouse Electric
* Woolworth
* Wright Aeronautical
Shrinking Gains
A thousand points isn’t what it used to be. When the Dow rose from 5,000 to 6,000, that was a 20% gain. But the move from 9,000 to 10,000 was about half that--an 11.1% gain.
Dow average: Pctg. gain of each 1,000-point advance
5,000 up 6,000: 20.0% 6,000 to 7,000: 16.7%
7,000 to 8,000: 14.3%
8,000 to 9,000: 12.5%
9,000 to 10,000: 11.1%
10,000 to 11,000: 10.0%
11,000 to 12,000: 9.1%
12,000 to 13,000: 8.3%
13,000 to 14,000: 7.7%
14,000 to 15,000: 7.1%
Sources: Times research, Dow Jones & Co.
