When Mr. Dow met Mr. Jones

real newspaper. They founded the Wall Street Journal daily business newspaper.

reading public.

Nearly everyone has asked, “What is or was a Dow Jones Average? Is it a real person, place or just a business moniker?”

It’s all of the above.

It is a weekday reading of 30 key American stocks reflecting the nation’s business climate.

Charles Dow and Edward Jones met as writers at the Providence Evening Press. Jones could skillfully and quickly analyze a financial report. They were committed to reporting on Wall Street without bias.

Other reporters at the time could be bribed into reporting favorably on a company to drive up stock prices. Dow and Jones refused to do so.

They believed Wall Street needed a financial news bureau. So they started the business firm of Dow, Jones & Co. in 1882. They developed an intricate system of reporting business news that allowed investors and business leaders to keep track of daily stock pricing.

In 1883, the company started an afternoon two-page business summary called the Customers’ Afternoon Letter. Their daily stock report included nine railroads, one steamship line and Western Union.

By 1889, the partners realized it was time to transform their two-page news summary into a

The first issue of the WSJ appeared July 8, 1889. It cost 2 cents per issue or $5 for a one-year subscription. Dow was the editor and Jones managed the desk work.

Although his name wasn’t on the Dow Jones Co.’s logo, Charles Bergstresser became an important founding partner.

The three journalists opened a wire service in 1882 that delivered news to investment houses along Wall Street. Their operation was in a basement of a building next door to the New York Stock Exchange. Bergstresser chose to be a silent partner. His strength lay in his interviewing skills. Jones once remarked Bergstresser could make a wooden Indian talk and tell the truth.

The WSJ has become one of the most respected financial publications in the world. It developed a series of principles for understanding and analyzing market behavior that later became the groundwork for technical analysis.

Charles Dow often warned his WSJ staff reporters about exchanging slanted stories for stock tips or free stock. Crusading for honesty in financial reporting, Dow published the names of companies that hesitated to give their information about profit and loss. Soon after, the newspaper gained power and respect from the

Vermont Royster, a later editor of the WSJ, said, “Dow always believed business information was not the ‘private province of brokers and tycoons.’”

Dow came up with a simple tracking system to monitor the nation’s daily business climate.

By tracking the closing stock price of 12 companies, adding up the stock prices, and dividing the total by 12, Dow came up with his “stock average.” In 1896, the first such average appeared in the WSJ.

Later, the Dow Jones Co. expanded the report to a “20 Active Stock” index, which included 18 railroad and two non-rail stocks That has been expanded and is known as the “Dow Jones Industrial Average.”

By 1898, the WSJ was a morning daily newspaper covering more than just financial news. Unlike other newspapers, the WSJ reported on such events as war without added rhetoric. Dow also added editorial columns called “Review and Outlook” and “Answers to Inquirers” in which readers sent in investment questions.

Jones retired in 1899, but Dow and Bergstresser stayed on. Dow continued writing editorials, focusing on the government’s position regarding American business. The WSJ set a precedent in reporting during the election of 1900 by endorsing White House incumbent

President William McKinley. He was reelected, with Theodore Roosevelt as vice president.

In 1893, many mergers began taking place, resulting in the formation of huge corporations. These corporations sought markets for their stock shares. The wildly speculative market meant investors needed information about stock activity; hence the active stock listing became vital to investors.

Over the years many companies have been added or subtracted, depending upon their company’s financial position. For example, K-Mart was dropped a few years ago. General Electric and Western Union were the only companies that survived the ups and downs of the many DJIA listings, but they are no longer among today’s 30 Dow industrials.

The current DJIA consists of

30 stocks and remains one of the world’s oldest and most popular stock indices.

The stocks on the lists are American Express, Amgen, Apple, Boeing, Caterpillar, Chevron, Cisco, Disney, Dow, Goldman Sachs, Home Depot, Honeywell, IBM, Intel, Johnson & Johnson, JP Morgan Chase, McDonalds, Merck, Microsoft, Nike, Procter & Gamble, Minnesota Mining & Manufacturing, Salesforce.com, Travelers, United Health, Verizon, Visa, Walgreens and Walmart.

To get the average, add up the daily stock prices in the listing and divide by 30. Whether you’re a small investor or a company CEO, or just interested, monitoring the daily DJIA is a reliable way of keeping tabs on the pulse of the nation’s business health and that’s certainly everyone’s business.

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