Some Very Basic Info on Corporations and Stocks Part III Mr. Leavins, BCHS

Key Measurement of the U.S. Stock Market: The Dow Jones Industrial Average

What is the Dow Jones Industrial Average? The Dow Jones Industrial Average (aka “The Dow”) is an index (a score- card if you will) of 30 large and important publicly-traded U.S. corporations The Dow Jones Industrial Average (DJIA) is communicated with “points,” not with prices The points in the DJIA, however, represent the prices of these 30 “Blue Chip” stocks Throughout the U.S. trading day (Weekdays, 8:30 am to 3 pm, central time) the DJIA is continually updated to give investors and observers a sense of how these leading companies are doing. At the end of the trading day, a final DJIA closing total is posted. Reporters might say, “The Dow gained 164 points today, closing at 17,721.”

What are the 30 Companies in 2016 that make of the Dow Jones Industrial Average? 3M Company, American Express, Apple, Boeing, Caterpillar Chevron, Cisco Systems, Coca-Cola, DuPont, Exxon-Mobil General Electric, Goldman Sachs, Home Depot, Intel, IBM JP Morgan Chase, Johnson & Johnson, McDonald’s, Merck, Microsoft Nike, Pfizer, Proctor & Gamble, Travelers, United Technologies UnitedHealth Group, Verizon, Visa, Wal-Mart, Walt Disney Company Recently, AT&T was kicked out of the Dow Jones Industrial Average AT&T was replaced by Apple

Why is the Dow Jones Industrial Average considered to be such a big deal? The Dow Jones Industrial Average (DJIA) follows the stock prices of 30 signature American publicly-traded companies considered to be bellwether stocks that are indicative of American economic prowess Generally, if the DJIA is strong, the other components of American stock markets are strong as well The DJIA is considered to be a vital sign regarding American economic health When the DJIA loses significant value, it is usually a sign of larger American economic weakness

Where did the Dow Jones Industrial Average close on January 19, 2001? Answer: 10,587

Where did the Dow Jones Industrial Average close on January 16, 2009? Answer: 8,281

5. During George W. Bush’s Presidency, the Dow Jones Industrial Average lost what percent of its value? The Dow Jones Industrial Average lost 21.8% of its value during George W. Bush’s presidency ( ) More specifically, the Dow Jones Industrial Average lost 2,306 points from January 19, 2001 (Bill Clinton’s last full trading day while in office) to January 16, 2009 (George W. Bush’s last full trading day while in office) During George W. Bush’s presidency, the Dow reached an all-time high of 14,164 on October 9, 2007, but during the Stock Market Crash of 2008, the Dow lost much of its value during the last months of Bush’s second term

A Summary of the 2008 Stock Market Crash

Where did the DJIA close on January 2, 2008, the first trading day of the year? Answer: 13,043

What happened on September 15, 2008? Investment Bank Lehman Brothers filed for bankruptcy, and became the spark that set off a larger stock market crash The fall of Lehman Brothers was tied to the housing market mortgage crisis, and by the end of 2008, the United States was suffering in what became known as The Great Recession (c ) You should regard September 15, 2008 as one of the most important dates in the last 40 years of American history Politically speaking, the stock market crash of 2008 made it very likely that Democratic nominee Barack Obama would win the 2008 presidential election. On November 4, 2008, Obama won a sweeping victory over Republican John McCain. On January 20, 2009, Obama became President.

What happened to the DJIA on September 15, 2008? Answer: DJIA lost 503 points, closing at 10,917

What happened to the DJIA on October 9, 2008? Answer: DJIA lost 678 points, closing at 8,579

What happened on October 27, 2008? Answer: DJIA lost 203 points, closing at 8,175

What happened on November 4, 2008? Answer: Senator Barack Obama (Democrat) won the 2008 Presidential Election

Where did the DJIA close on December 31, 2008? Answer: The Dow Jones Industrial Average ended 2008 at 8,776, having lost 33% of its value in 2008

Again, what happened on January 16, 2009? Answer: On George W. Bush’s last full trading day in office, the DJIA closed at 8,281

The Stock Market in the Obama Era The U.S. stock market crash continued into the first couple of months of the Obama presidency, a low point for the DJIA being reached with a 6547 close on March 9, 2009 During President Obama’s first term (January 20, 2009 to January 20, 2013), the DJIA grew modestly In 2013, however, the Dow Jones Industrial Average grew robustly, closing above 15,000 in May On December 23, 2014, the DJIA closed at 18,024 On April 12, 2016, the Dow Jones Industrial Average closed at 17,721

What happened on January 20, 2009? Answer: Barack Obama became President of the United States

What happened on March 5, 2013? Answer: The DJIA reached a record high of 14,253

What happened on May 7, 2013? Answer: The DJIA closed above 15,000

What happened on December 23, 2014? Answer: The DJIA closed at 18,024, a record high at that time

Where did the Dow Jones Industrial Average close on April 12, 2016? Answer: 17,721

From January 16, 2009 to April 12, 2016, how much did the DJIA increase in value? The Dow Jones Industrial Average grew 9440 points, growing from 8,281 on January 19, 2009 to 17,721 on April 12, 2016 From January 16, 2009 to April 12, 2016, the Dow Jones Industrial Average increased in value by 114% The Barack Obama presidency will end on January 20, 2017