|Dow Jones Industrial Average
The Dow Jones Industrial Average (NYSE: DJI, also called the DJIA, Dow 30, INDP, or informally the Dow Jones or The Dow) is one of several stock market indices, created by nineteenth-century Wall Street Journal editor and Dow Jones & Company co-founder Charles Dow. It is an index that shows how certain stocks have traded. Dow compiled the index to gauge the performance of the industrial sector of the American stock market. It is the second-oldest U.S. market index, after the Dow Jones Transportation Average, which Dow also created.
The average is computed from the stock prices of 30 of the largest and most widely held public companies in the United States. The "industrial" portion of the name is largely historical—many of the 30 modern components have little to do with traditional heavy industry. The average is price-weighted. To compensate for the effects of stock splits and other adjustments, it is currently a scaled average, not the actual average of the prices of its component stocks—the sum of the component prices is divided by a divisor, which changes whenever one of the component stocks has a stock split or stock dividend, to generate the value of the index. Since the divisor is currently less than one, the value of the index is higher than the sum of the component prices.
The DJIA was founded on May 26, 1896, and represented the average of twelve stocks from important American industries. Twelve years earlier, Mr. Dow’s initial stock average, containing 9 railroads and 2 industrial stocks appeared in the Customer’s Afternoon Letter a daily two-page financial news bulletin that was the precursor of Wall Street Journal. Of those original twelve now, no longer railroad, but purely industrial stocks, only General Electric is currently part of the index.
When it was first published, the index stood at 40.94. It was computed as a direct average, by first adding up stock prices of its components and dividing by the number of stocks in the index. The index hit its all-time low of 28.48 during the summer of 1896, but many of the biggest percentage price moves in The Dow occurred early in its history, as the nascent industrial economy matured. The Dow averaged 5.3% compounded annually for the 20th century, a record Warren Buffett called "a wonderful century"—when he calculated that to achieve that return again, the index would need to reach nearly 2,000,000 by 2100.
The individual components of the DJIA are occasionally changed as market conditions warrant. When companies are replaced, the scale factor used to calculate the index is also adjusted so that the value of the average is not directly affected by the change.
On November 1, 1999, Chevron, Goodyear Tire and Rubber Company, Sears Roebuck, and Union Carbide were removed from the DJIA and replaced by Intel, Microsoft, Home Depot, and SBC Communications. Intel and Microsoft became the first two companies traded on the NASDAQ exchange to be listed in the DJIA. On April 8, 2004, another change occurred as International Paper, AT&T, and Eastman Kodak were replaced with Pfizer, Verizon, and AIG. On December 1, 2005, AT&T returned to the DJIA as a result of the SBC Communications and AT&T merger. Altria Group and Honeywell were replaced by Chevron and Bank of America on February 19, 2008. On September 22, 2008, Kraft Foods replaced American International Group in the index.
With the current inclusion of only 30 stocks, critics like Ric Edelman argue that the DJIA is not a very accurate representation of the overall market performance even though it is the most cited and most widely recognized of the stock market indices.
Additionally, the DJIA is criticized for being a price-weighted average, which gives relatively higher-priced stocks more influence over the average than their lower-priced counterparts, but takes no account of the relative size or market capitalization of the components. For example, a $1 increase in a lower-priced stock can be negated by a $1 decrease in a much higher-priced stock, even though the first stock experienced a larger percentage change. In addition, a $1 move in the smallest component of the DJIA has the same effect as a $1 move in the largest component of the index. As of February 2009, IBM is the highest priced stock in the index and therefore has the greatest influence on it. Many critics of the DJIA recommend the float-adjusted market-value weighted S&P 500 or the Dow Jones Wilshire 5000, the latter of which includes all U.S. securities with readily available prices, as better indicators of the U.S. market.
Another issue with the Dow is that not all 30 components open at the same time in the morning. On the days when not all the components open at the start, the posted opening price of the Dow is determined by the price of those few components that open first and the previous day's closing price of the remaining components that haven't opened yet; on those days, the posted opening price on the Dow will be close to the previous day's closing price (which can be observed by looking at Dow price history) and will not accurately reflect the true opening prices of all its components. Thus, in terms of candlestick charting theory, the Dow's posted opening price cannot be used in determining the condition of the market.
February 26, 2009
Gold Slides Near 2-Week Low
Experts say the precious metal could be winding up for a rebound as investors seek safety.
LONDON (Reuters) – Gold slid in choppy trade on Thursday to its lowest in nearly two weeks, but analysts said the retreat could prompt further buying by investors seeking a safe place to park their assets.
Spot gold fell to $930.80 an ounce, the lowest since Feb. 11. It was $935.60/937.60 an ounce at 11:08 a.m. ET, compared to $952.10 late in New York on Wednesday, and an 11-month high above $1,000 last week.
"It's had such a strong run, it seems to have run out of steam," Fairfax analyst Marc Elliott said.
Investors have been piling into gold since last October as the financial crisis escalated after the collapse of Lehman Brothers.
Fears that the massive amounts of money being pumped into the global economy by central banks and governments will eventually result in spiraling inflation have been another reason for investors to buy gold.
However, analysts say demand may remain subdued for a while after U.S. Federal Reserve Chairman Ben Bernanke said he had a strategy to keep inflation under control as the economy recovers. "Gold will go up when there are uncertainties around, (but) when banking pressures ease then you'll probably see gold drifting back again," a trader said.
The precious metal came under further pressure in afternoon trade as stock markets recovered.
Last Friday gold's high of $1,005.40 an ounce was not far from the record high of $1,030.80 an ounce hit last March.
Prices have been boosted by buying for exchange traded gold-backed funds (ETFs), the biggest of which is the SPDR Gold Trust. SPDR's holdings hit a record above 1,028 tonnes last week, but since then have remain unchanged.
"We've seen the flows into physically backed ETFs come to a standstill over the past few sessions, and in turn prices are easing as they are not able to draw the same support from investment demand," Barclays Capital analyst Suki Cooper said.
"The external environment at the moment isn't entirely positive for gold. We've seen the dollar strengthening as well."
Analysts said a generally firmer dollar against the euro will also weigh on precious metals market sentiment in Europe, as a higher U.S. currency makes metals priced in dollars more expensive for holders of other currencies.
Spot silver fell more than 5% to a three-week low of $12.97 an ounce. It was last at $13.11/13.17 from $13.69.
"In terms of silver ... industrial demand, jewelry, and photography demand all look very weak," Cooper added.
Platinum, also a precious industrial metal, was at $1,043.50/1,053.50 an ounce from $1,044 on Wednesday. The metal used in autocatalysts to clean car emissions has been battered alongside auto sales.
К тексту «Dow Jones Industrial Average»
Dow Jones Industrial Average – индекс Доу Джонса для акций промышленных компаний, индекс курсов акций промышленных компаний Доу-Джонса, промышленный индекс Доу Джонса
NYSE – New York Stock Exchange – Нью-Йоркская биржа
to compile – составлять
to gauge – измерять
performance – динамика поведения
Dow Jones Transportation Average – индекс Доу Джонса для акций транспортных компаний, транспортный индекс Доу Джонса
widely held – иметь большое распространение
price-weighted index – индекс, взвешенный по ценам – (фондовый индекс, в котором акции взвешиваются в соответствии с их ценами, т. е. более дорогие акции имеют более высокий удельный вес; в последние годы чаще используется взвешивание по рыночной стоимости, т. е. по рыночной капитализации)
stock split – дробление [расщепление] акций – (увеличение числа акций компании путем уменьшения номинала акций; величина акционерного капитала при этом не меняется, увеличивается только количество акций)
adjustment – механизм регулирования; регулятор
scaled average – масштабируемое среднее — сумма цен делится на делитель, который изменяется всякий раз, когда входящие в индекс акции подвергаются дроблению (сплиту) или объединению (консолидации)
divisor – делитель
stock dividend – дивиденд в форме акций (выплачивается акциями, а не деньгами), дивиденд на акции [акцию], дивиденд по акциям [акции] (часть прибыли компании, выплачиваемая владельцу акции/акций)
bulletin – бюллетень, краткое официальное сообщение, бюллетень, периодическое издание (научного общества), сводка новостей, информационное сообщение
precursor – предшественник; предтеча, предвестник
nascent – рождающийся, возникающий; в стадии возникновения; появляющийся, образующийся
to warrant – служить оправданием, основанием
S&P 500 – Standard and Poor's 500 Stock Index – список из 500 избранных акционерных компаний США, имеющих наибольшую капитализацию. Список принадлежит компании Standard & Poor's и ею же составляется
Wilshire 5000 Equity Index – индекс акций "Уилшир-5000" (самый широкий фондовый индекс в США, представляющий примерно 6,5 тыс. акций, взвешенных на капитализацию компаний-эмитентов; выражается в миллиардах долларов; база - 31 декабря 1980 г.; рассчитывает индекс фирма "Уилшир Ассоушиитс" (Санта-Моника, Калифорния); данный индекс считается индикатором широких тенденций движения фондового рынка)
candlestick chart – график "японские свечи" (используется в техническом анализе, при котором изображают максимальную цену, минимальную цену, цену открытия и цену закрытия, аналогично столбиковому графику; отличается цветом столбиков, которые отражают рост и падение курсов в течение дня; белая свеча означает, что цена закрытия выше цены открытия; черная - что цена закрытия ниже цены открытия; впервые стал применяться на японских опционных рынках риса)
opening price – цена [курс] открытия – курс на момент открытия биржи; начальный курс
closing price – заключительная цена, цена в момент закрытия биржи