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Top 42. Oct 25, 1999 1:22 PM

» DennisL - Small Cap Stocks Comeback?

When a caller this weekend asked Brinker about small cap stocks making a comeback, BB said no, that he just doesn't see it happening yet.

I haven't tracked the numbers, but just looking at the Yahoo finance page that has the quotes for all of the major indexes (click here) every day, it seems like the Russell 2000, the S&P 400 mid cap index, and the S&P 600 small cap index have all been gaining ground on the S&P 500 index and the Wilshire 5000. Especially on the down days, when the S&P 500 really gets hammered, the other indexes don't suffer as badly.

Does anyone have any definitive numbers on this or any strong opinions one way or the other on this question going forward?

-- posted by DennisL

Top 43. Oct 26, 1999 7:20 AM

» Kirk - More on New DOW Components

More on New DOW Components
Dow Reshuffles, Adds First Nasdaq StocksReuters Business News
Stocks Open Higher, Focus On Dow Changes Reuters Business News
INSTANT VIEW - Dow Industrials get four new stocks Comments from some leading analysts
New Dow Industrial components from CBS Marketwatch

-- posted by Kirk

Top 44. Oct 26, 1999 7:33 AM

» Rande - Kirk,

Kirk,

Great links -- first time ever for Nasdaq stocks on the Dow. Incredible stuff.

BTW -- if you're checking out the Dow on CBSMarketwatch.com, they're erroneously showing the index down about 122 points right now. Something wrong with previous close info, since current price is okay.

-- posted by Rande

Top 45. Oct 26, 1999 7:42 AM

» Kirk - I'm "Multi Media" these days Rande.

I'm "Multi Media" these days Rande.
Computer plus
CNBC on the TV
Jazz on the Stereo or News from CNBC like today where there is news I might be interested in (I LOVE statistics like I just gave on how different components are doing. I am waiting for them to calculate how the DOW with the new components would have done if they were in the averages since 1990.)

-- posted by Kirk

Top 46. Oct 26, 1999 7:48 AM

» Rande - Looks like CBSM fixed the problem.

Looks like CBSM fixed the problem.

-- posted by Rande

Top 47. Oct 26, 1999 8:07 AM

» JenL_3 - The Dow Revamps

This from 10/26 WSJ:

Revamp Is Set for Dow Industrials,
Emphasizing Technology, Telecom

NEW YORK -- Sweeping changes will be made to the Dow Jones Industrial Average on Nov. 1, giving technology and telecommunications greater representation in the 103-year-old stock-market average and adding Nasdaq Stock Market issues to its roster for the first time.

Four component stocks will be changed: Microsoft Corp., Intel Corp., SBC Communications Inc. and Home Depot Inc. will be added, while Chevron Corp., Goodyear Tire & Rubber Co., Sears, Roebuck & Co. and Union Carbide Corp. will be removed.

Technology-industry giants Microsoft and Intel are both traded on the Nasdaq market. Previously, all components of the 30-stock industrial average have been listed on the New York Stock Exchange.

"The changes we are announcing today will make the Dow Jones Industrial Average even more representative of the evolving U.S. economy, as the average -- and the nation -- enter a new century," said Paul E. Steiger, managing editor of The Wall Street Journal, in a statement. The editors of the Journal, published by Dow Jones & Co., maintain the average.

The changes mirror the dramatic shift that has taken part in the U.S. economy over the past 25 years. Companies like Microsoft and Intel, founded in 1975 and 1968, respectively, have become dominant players in U.S. industry, pushing aside traditional industrial and energy companies.

The stocks that will be dropped have had long histories in the industrial average. Sears has been a component since 1924, Union Carbide since 1928, and Goodyear and Chevron since 1930. Chevron also had a brief run in the average earlier, in 1924 and 1925.

Before now, the most recent changes in the Dow Jones Industrial Average came in March 1997, in another set of changes that mirrored the changing dynamics of Corporate America. At that time, Hewlett-Packard Co., Johnson & Johnson, Wal-Mart Stores Inc. and what is now Citigroup Inc. replaced Texaco Inc., Bethlehem Steel Corp., Woolworth Corp. and Westinghouse Electric Corp. Woolworth is now known as Venator Group Inc., while Westinghouse has been restructured and reborn as CBS Inc.

"Today's changes in the Dow Jones Industrial Average represent a streamlining of its components on a sectoral basis, and are the culmination of a comprehensive review of the 30 stocks we undertook over the last several months," said John A. Prestbo, editor of Dow Jones Indexes and markets editor of The Wall Street Journal.

Although never part of the industrial average until now, Nasdaq-listed stocks have been included in the Dow Jones Transportation Average since 1991. There are five now in the 20-stock average: Alexander & Baldwin Inc., J.B. Hunt Transportation Services Inc., Northwest Airlines, USFreightways Corp. and Yellow Corp.

In addition to the industrial and transportation averages, the Journal also maintains the 15-stock Dow Jones Utilities Average. All of the utility stocks are listed on the New York Stock Exchange.

The Dow Jones Industrial Average is the oldest continuous barometer of the U.S. stock market. The average was created by Dow Jones & Co. co-founder Charles H. Dow and first appeared May 26, 1896. The average initially comprised 12 companies, but companies were added as the economy expanded. The first 30-stock average was created in 1928.

In addition to the Dow Jones Averages, Dow Jones also produces two major sets of indexes: the Dow Jones Global Indexes and the Dow Jones STOXX Indexes, which cover Europe and the Euro Zone.

In addition to The Wall Street Journal and its interactive and overseas editions, Dow Jones publishes the Dow Jones Newswires, Barron's and SmartMoney magazines and the Ottaway group of community newspapers. It is also co-owner of Dow Jones Reuters Business Interactive LLC and of CNBC television operations in Asia and Europe.

....Jen

-- posted by JenL_3

http://averages.dowjones.com/

Top 48. Oct 26, 1999 8:26 AM

» JenL_3 - A DJIA Primer

and this also from 10/26 WSJ:

Dow Jones Industrial Average: a Primer

The Dow Jones Industrial Average, created by Dow Jones & Co. co-founder Charles H. Dow, first appeared May 26, 1896.

The Dow Jones Industrial Average initially comprised 12 companies, most of which are unfamiliar today: American Cotton Oil; American Sugar; American Tobacco; Chicago Gas; Distilling & Cattle Feeding; General Electric; Laclede Gas; National Lead; North American; Tennessee Coal & Iron; U.S. Leather and U.S. Rubber.

As the economy expanded, companies were added to the average. The first publication of an average comparable to today's 30 industrial stocks was Oct. 1, 1928. The average closed that day at 240.01.

The average would fall to a low of 41.22 on July 8, 1932, and would take more than 40 years to reach 1000, first closing above that lofty mark on Nov. 14, 1972. The Dow Jones Industrial Average first closed above 2000 on Jan. 8, 1987; above 3000 on April 17, 1991; above 4000 on Feb. 23, 1995; above 5000 on Nov. 21, 1995; above 6000 on Oct. 14, 1996; above 7000 on Feb. 13, 1997; above 8000 on July 16, 1997; above 9000 on April 6, 1998; above 10000 on March 29, 1999; and above 11000 on May 3, 1999.

How the Dow Jones Industrial Stocks Are Selected

Dow Jones's flagship publication, The Wall Street Journal, is the keeper of the Dow Jones Industrial Average. Journal editors select the 30 companies that comprise the index.

"The stocks are chosen as representative of the broad market and of American industry," according to Journal Managing Editor Paul E. Steiger. "The companies are major factors in their industries, and their stock is widely held by individuals and institutional investors."

For the sake of continuity, changes in the components of the Dow Jones Industrial Average are kept to a minimum. Most substitutions have been the result of mergers, but from time to time changes may be made to achieve better representation. Before today's changes, the most recent changes occurred March 17, 1997 when four stocks were replaced: Travelers Group Inc. (now Citigroup Inc.) replaced Westinghouse Electric Corp.; Hewlett-Packard Co. replaced Texaco Inc.; Johnson & Johnson replaced Bethlehem Steel Corp. and Wal-Mart Stores Inc. replaced Woolworth Corp.

How the Dow Jones Industrial Average Is Computed

Tracking the Dow Jones Industrial Average is done second-by-second with computers these days. But they follow the procedure developed a century ago when Charles H. Dow, with pencil and paper, added the stocks' closing prices, then simply divided by the number of issues.

The industrial average still is calculated by totaling the prices of the component stocks. But rather than divide that total by 30 (the number of stocks in the index), the total is divided by a regularly adjusted divisor, currently 0.19740463. (The current divisor is published every business day inside the Money & Investing section of The Wall Street Journal and on a page in the Interactive Journal's Markets Data Center.) The divisor, adjusted to maintain the historical continuity of the average, is recalculated for stock splits, spinoffs and changes in the component stocks.

Over the history of the average, the divisor has changed many times, mostly downward. This explains why the average can be reported as, for example, 10000, although no single stock in the average approaches that price level. Today, a one dollar rise in the price of a component stock would raise the Dow Jones Industrial Average roughly five points, assuming prices of the other 29 stocks were unchanged.

The New 30

As of November 1, 1999, these are the 30 stocks of the Dow Jones Industrial Average:

Allied Signal Inc. (ALD); Alcoa (AA); American Express Co. (AXP); AT&T Corp. (T); Boeing Co. (BA); Caterpillar Inc. (CAT); Citigroup Inc. (C); Coca-Cola Co. (KO); DuPont Co. (DD); Eastman Kodak Co. (EK); Exxon Corp. (XON); General Electric Co. (GE); General Motors Corp. (GM); Hewlett-Packard Co. (HWP); Home Depot, Inc. (HD); Intel Corp. (INTC); International Business Machines Corp. (IBM); International Paper Co. (IP); J.P. Morgan & Co. (JPM); Johnson & Johnson (JNJ); McDonald's Corp. (MCD); Merck & Co. (MRK); Microsoft Corp. (MSFT); Minnesota Mining & Manufacturing Co. (MMM); Philip Morris Cos. (MO); Procter & Gamble Co. (PG); SBC Communications Inc. (SBC); United Technologies Corp.(UTX); Wal-Mart Stores Inc. (WMT); and Walt Disney Co. (DIS).

Historical Background and Other Dow Jones Indexes

At the age of 103, the Dow Jones Industrial Average is the oldest continuous barometer of the U.S. stock market, and the most widely used indicator of stock market activity.

Today, Wall Street Journal editors maintain three other stock averages in addition to the Dow Jones Industrial Average. The other Dow Jones Averages include: the Dow Jones Transportation Average, composed of 20 transportation issues; the Dow Jones Utilities Average, with 15 utilities; and the Dow Jones Composite Average of all 65 stocks.

A wealth of information about the Dow Jones Industrial Average can be found at the Dow Jones Averages Web site:

The site includes:

- Historical charts of the industrial average, since its inception

- The ability to search for the closing value of the industrial average on any date since 1896

- Big rises and falls, and best and worst years, for the average

- Comparisons with other indexes

- Details on divisor changes.

In addition to the Dow Jones Averages, Dow Jones also produces two major index series, the Dow Jones Global Indexes (introduced in 1993) and the Dow Jones STOXX Indexes (introduced in 1998) which cover Europe and the Euro Zone. Both are capitalization weighted, computed using the component stocks' market value -- prices times shares outstanding -- rather than prices alone. Dow Jones Indexes also publishes a number of specialty indexes, including the Dow Jones Internet Indexes, the Dow Jones Global Titans Index, the Dow Jones Islamic Market Indexes, the Dow Jones Sustainability Group Indexes and the Dow Jones Asia Pacific Extra Liquid Series Indexes.

--This primer was prepared by Dow Jones Indexes.

.....Jen

-- posted by JenL_3

Top 49. Oct 26, 1999 10:30 AM

» BPyles - DJIA facts

Jen: Thanks for post re DJIA facts. Have saved it for future reference. I wonder if there is some message in the fact that GE has continued as component for 103 years?

-- posted by BPyles

Top 50. Oct 28, 1999 3:25 PM

» DennisL - Post-Y2K Buying Spree?

Wanna read something really bullish about the U.S. stock market after Y2K? This author believes that we are going to see a "January effect" like we've never seen before.

Excerpt:

Here's my bottom line -- American investors have been spooked by unidentified flying Y2K objects. This Halloween, many Americans are hoarding cash. And that trend will intensify through New Year's Eve.

Meanwhile, many American investors like Jerry will also be armed and ready to come rushing back into the market in January, spending and investing their hordes of cash. So get ready for a renewed bull market accelerating us on into the new millennium with a resounding cheer, rather than a frightening boo!

full story

-- posted by DennisL