History of the Dow Graph: A 130-Year Saga of Market Milestones

Introduction

The Dow Jones Industrial Average (DJIA), commonly known as the Dow, is one of the world's most widely followed stock market indicators. Its history spans over 130 years, serving as a barometer of American economic growth, market fluctuations, and investor confidence.

The Genesis: 1896-1928

The DJIA was created by Charles Dow and Edward Jones in 1896. It initially comprised 12 major industrial companies, including General Electric, American Cotton Oil, and Distilling & Cattle Feeding. The index grew to 20 companies in 1916 and 30 in 1928, shaping its present-day composition.

The Roaring Twenties: 1929-1932

The 1920s witnessed a meteoric rise in the Dow, reaching its peak of 381.17 in September 1929. However, the euphoria was short-lived. The infamous "Black Tuesday" crash in October 1929 triggered a devastating market collapse that erased 90% of the Dow's value within two years.

The Great Depression: 1933-1945

The Great Depression crippled the American economy, and the Dow remained subdued throughout the 1930s. By 1942, the index had fallen to a low of 40.56, representing a 90% drop from its pre-crash high.

Post-War Boom: 1946-1966

After World War II, the American economy experienced a rapid expansion. The Dow rebounded strongly, crossing the 1,000-point mark in 1956 and setting a new record of 968.92 in October 1966.

The Vietnam Era and Stagflation: 1967-1982

The Vietnam War and subsequent stagflation took their toll on the Dow. The index fluctuated erratically throughout the 1970s, reaching a low of 577.60 in December 1974.

The Bull Market of the 1980s: 1983-1987

Under the Reagan administration, the economy flourished, and the Dow embarked on a record-breaking bull market. The index surged to a high of 2,722.42 in August 1987, marking a 2,767% increase since the 1974 low.

The Crash of 1987: October 19

On October 19, 1987 ("Black Monday"), the Dow plummeted 22.6%, marking its biggest one-day percentage drop ever. The cause of the crash remains a subject of debate, but it highlighted the potential volatility of the stock market.

The Lost Decade: 1990-1999

The 1990s were characterized by economic stagnation and a lackluster Dow performance. The index closed the decade close to where it began, with little net growth.

The Dot-Com Boom and Bust: 2000-2003

The rapid rise of the internet fueled a tech-stock bubble in the late 1990s. The Dow surged to a record close of 11,722.98 in January 2000. However, the bubble burst in 2001, triggering a sharp decline that erased over 40% of the Dow's value.

The Recovery and Great Recession: 2004-2011

The Dow recovered from the dot-com bust in the early 2000s, reaching a new high of 14,164.53 in October 2007. However, the subprime mortgage crisis sparked a financial crisis that led to a severe market downturn. The Dow plunged to 6,547.05 in March 2009, losing nearly half its value.

The Bull Market of the 2010s: 2012-2020

Following the Great Recession, the economy entered a prolonged period of recovery. The Dow resumed its upward trajectory, reaching a record close of 29,551.42 in February 2020. The decade was marked by low interest rates and a steady economic expansion.

The COVID-19 Pandemic: 2020-Present

The COVID-19 pandemic sent shockwaves through the global economy, including the stock market. The Dow fell sharply in March 2020, losing over 30% of its value in just a few weeks. However, the market rebounded strongly with unprecedented government stimulus and the development of vaccines. By March 2021, the Dow had fully recovered its losses and reached new all-time highs.

Table 1: Key Dow Milestones

Table 2: Dow Market Cycles

Table 3: Companies Comprising the Dow

Table 4: Economic Factors Impacting the Dow

The Future of the Dow

The Dow Jones Industrial Average remains one of the most important and frequently cited stock market indicators