The Dow announced that it is replacing the current Kraft Foods (KFT) in the index with UnitedHealth Group (UNH) at the close of market on Friday, September 21, 2012.
The Dow Jones Industrial Average is also known as Dow, Dow 30, Industrial Average, DJIA and Dow Jones. It is one of the stock market indexes. Other market indexes include S&P 500, NASDAQ, Russell 2000 and many others. The Dow was created by Dow Jones & Company and the Wall Street Journal co-founder Charles Dow in May 26, 1896. His partner was Edward Jones, a statistician. Hence, the index is known as Dow Jones. The Dow is the most commonly watched market index. The Dow consists of 30 stocks generally referred to as Dow Components. The General Electric (GE) which was added to the index in 1907 is the oldest among the 30 and UNH will become the most recent when added to the index this month. Even though the index refers to industrial, the name is no longer fully represents major industries. The average is calculated giving attention to stock price, dividend payments, stock splits and other adjustments.
The Dow is the most cited and widely used. However, many criticize the index because it is price-weighted.