In Recognition, New York City Proclaims May 26, 2011 'Dow Jones Industrial Average Day''Talking About the Stock Market Without Mentioning The Dow …… is Like Talking About the Weather Without Mentioning the Temperature'
NEW YORK, May 11, 2011 (GLOBE NEWSWIRE) -- The year 1896 was notable for many things: the X-ray was discovered and the world's first movie theater opened. Utah was admitted as America's 45th state and the first modern Olympic Games were staged in Athens. It was also the year the first Tootsie Roll was produced.
But for the financial world, 1896 was a watershed – because on May 26 of that year, the Dow Jones Industrial Average debuted. And, in this, its 115th year, the iconic index is just as vibrant and important as ever.
"Looking back at The Dow from its early days of being published in The Wall Street Journal, it has become a daily fixture in American life," said John A. Prestbo, Editor and Executive Director of Dow Jones Indexes. "It is the gold standard in measuring economic health and prosperity with a track record unrivaled by any other index. The Dow continues to be the most quoted measure of the U.S. stock market globally and it remains the answer to the question: 'What did the market do today?'"
At a press conference today to commemorate The Dow's 115th anniversary, Mr. Prestbo announced that May 26, 2011 has been officially proclaimed "Dow Jones Industrial Average Day" in New York City, the location of The Dow's birth.
In remarks to the media today, Mr. Prestbo explained why the number of components in the Dow Jones Industrial Average has held at 30 for the past 83 years, how and by whom they are selected, and the rationale for The Dow's price-weighted methodology.
"Someone once wrote that talking about the stock market without mentioning the Dow Jones Industrial Average is like talking about the weather without mentioning the temperature," Mr. Prestbo said. "That's hard to argue."
In addition to Mr. Prestbo, today's speakers included:
- Richard Sylla, the Henry Kaufman Professor of the History of Financial Institutions and Markets and a professor of economics at New York University's Stern School of Business;
- Trevor A. Schauenberg, the Director of Investor Relations for General Electric; the only remaining charter member of The Dow; and
- Steven A. Schoenfeld, President of Global Index Strategies; Investment Strategist with Red Lighthouse Investment Management; and Editor of the book, Active Index Investing.
"The Dow is the granddaddy of stock indexes," Professor Sylla said. "It has been available on a daily basis since 1896, before the November elections in which William McKinley defeated William Jennings Bryan for the presidency. From then to now, The Dow has been the mirror reflecting not just our financial and economic history, but even the day-to-day unfolding of our history as a nation."
Mr. Schauenberg explained how being a component stock in The Dow benefitted GE. "As an original member of The Dow, there's no question that membership in this exclusive club for more than 100 years is recognition of our long-term enterprise sustainability and evolution," he said. "We believe The Dow is an important benchmark by which to measure our performance and our inclusion has expanded our shareholder base over time."
Global Index Strategies' Mr. Schoenfeld said: "Long before there were index funds or stock index futures, investors across the country and around the world would use the levels and price changes of The Dow to 'take the pulse' of the stock market, while researchers would use its movements for trend analysis. Whether they knew it at the time or not, The Dow's creators established a foundation for the concept of indexing: using benchmarks as the investment objective of a portfolio."
The Dow Jones Industrial Average is owned by Dow Jones Indexes, part of a joint venture company owned 90 percent by CME Group Inc. and 10 percent by Dow Jones & Company, Inc., a News Corporation company (Nasdaq:NWS) (Nasdaq:NWSA) (ASX:NWS) (ASX:NWSLV).
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Dow Jones Indexes is a leading full-service index provider that develops, maintains and licenses indexes for use as benchmarks and as the basis of investment products. Best-known for the Dow Jones Industrial Average, Dow Jones Indexes offers more than 130,000 equity indexes as well as fixed-income and alternative indexes, including measures of hedge funds, commodities and real estate. Dow Jones Indexes employs clear, unbiased and systematic methodologies that are fully integrated within index families.
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