Tuesday/ wow: Dow 30,000

The venerable Dow Jones Industrial Average stock market index closed above 30,000 for the first time today. (Trump can eat his words now— the ones where he had said the stock market would crash if Biden won).

These slides are from the online Wall Street Journal. The annotations are mine.

The Dow Jones Industrial Average debuted on May 26, 1896, the brainchild of Charles Dow and his statistics-minded business partner Edward Jones. Back then its components were 12 smoke-stack companies: American Cotton Oil, American Sugar, American Tobacco, Chicago Gas, Distilling & Cattle Feeding, General Electric, Laclede Gas, National Lead, North American, Tennessee Coal and Iron, U.S. Leather, and U.S. Rubber.
In 1928, the Dow was expanded to include 30 companies. Companies from older industries are replaced from time to time by newer ones. (This slide is old, actually. ExxonMobil & United Technologies are out of the Dow). The current 30 components are: 3M, American Express, Amgen, Apple, Boeing, Caterpillar, Chevron, Cisco Systems, Coca-Cola, Disney, Dow, Goldman Sachs, Home Depot, Honeywell, IBM, Intel, Johnson & Johnson, JP Morgan Chase, McDonald’s, Merck, Microsoft, Nike, Procter & Gamble, Salesforce, Travelers, UnitedHealth, Visa, Walgreens, and Walmart.
Check out this steep drop in Feb & March when the reality of the pandemic set in .. but then the Federal Reserve’s massive, multi-trillion-dollar economic stimulus, and optimism due to the Covid-19 vaccine announcements overcame all of that, in just 9 months. Make no mistake, though. This optimistic stock market index does not reflect the general state of the national economy. There is still a loonng road ahead to repair the widespread damage the pandemic had done.
This slide shows how the spectacular growth of the tech giants offset the poor performance of the industrial companies. (Not sure why GE & XOM are shown. GE was removed from the DJIA in 2018, after which none of the original components of the DJIA remained. Exxon Mobil was removed in August this year).

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