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Dow Jones Transportation Average

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The Dow Jones Transportation Average is the oldest of all four Dow Jones averages. The Dow Jones Transportation Average was created back in 1884 when Charles Dow created the first Dow Jones stock index. Primarily made of railroad companies, the first Dow Jones stock index then evolved into the Dow Jones Transportation Average. The Dow Jones Transportation Average is not a market capitalization weighted index. The Dow Jones Transportation Average is a price weighted index quoted in points, not dollars. The Dow Jones Transportation Average is calculated by summing the prices of each stock and dividing the sum by a divisor. Adjustments are made to the divisor of the Dow Jones Transportation Average to account for a stock price change due to a corporate action (i.e. stock split, stock dividends). The Dow Jones Transportation Average includes 20 transportation stocks from the railway, trucking, airline, and delivery industries selected at the discretion of the editors of the Wall Street Journal (WSJ). To be included in the Dow Jones Transportation Average, a company must be a leading US company in the transportation sector. Although there are no official rules of selection, a Dow Jones Transportation Average company goes thru a detailed analysis prior to final selection. The editors of the WSJ also maintain and review the Dow Jones Transportation Average. In an effort to maintain continuity of the index, companies included in the Dow Jones Transportation Average rarely change.



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