Key U.S. stock index Dow Jones Industrial Average may change the name first time in its 113-year history. This will be provided if the current owner of the index, a company of the Australian media tycoon Rupert Murdoch's News Corp., Will sell its new owner. News Corp., Apparently, wants to get rid of the brand that are not profitable in the financial crisis. The company has hired investment bank Goldman Sachs to find a buyer.
History indexation quotes American stock markets began with the Dow Jones. In 1884 the editor of The Wall Street Journal, Charles Dow created the Dow Jones Transportation Average, which combined the performance of stocks of eleven transportation companies, especially rail. And in 1896, was set up similar to the largest industrial manufacturers - Dow Jones Industrial Average - which survived until our days.
As the historian of the American stock market, Professor of Finance Charles Gaysst (Charles Geisst), before the stock indices on American exchanges chaos reigned. "Manipulation, rumors, the paid news - that dominated the market," - he said in a blog in The Wall Street Journal. According to him, with the advent of Dow no longer be simply to say "it was a bad day, to arrange the sale. Thus, the influence of Dow Jones on the formation of a developed stock market in the United States can not be overemphasized.
Golden days of the index has experienced in the 50's - 60's. Shock after the stock market crash since the Great Depression took place, and small investors once again began to actively invest in stocks on the background of postwar prosperity. Interest in the stock quotes across America has led to that board, showing the Dow Jones index and the changes were installed virtually everywhere.
The word in the title of Industrial Dow Jones index is a tribute to tradition. In reality, included in the index companies cover all economic sectors, including finance, insurance and services.
However, the 70-ies the situation changed again. Financial management in the period was more "scientific" in the market, a host of professional managers. They used a more integrated approach, given the large number of quotations. As a result, the popularity of Dow, united the shares only 30 largest companies, declined substantially. At first the plan began to go broader indicators, such as the S & P 500, which tracks changes in the value of 500 shares of leading U.S. corporations.
Profit from the drafting of the Dow Jones index began to decline gradually. As a result, in 2007 the company engaged in this work, was sold to News Corp. Since its separate financial figures are not published. Recent data also showed an independent company annual sales of $ 101 million.
Meanwhile, the inclusion of Dow Jones in the structure of media giant News Corp. the corporation of Rupert Murdoch did not bring much benefit. The total value of the company (not only the service for indexing, but also numerous media, including The Wall Street Journal), was in 2007 5,2 billion dollars. Of these, about 2,8 billion during the credit crisis had to be written off.
So news that Dow Jones a sensation not become, cause that's what I was going. Apparently, News Corp. recognized this experiment failed. However, to sell Dow Jones Murdoch will not together with related media companies, but separately. It is in connection with this fact and rumor that the Dow Jones index may change its name. At the same time being exempt from a number of assets, News Corp. intends to establish on the basis of The Wall Street Journal system of paid economic and financial news, analytical articles and reviews (now access to The Wall Street Journal is paid in part).
The amount of the transaction is estimated as 700 million. The main contenders for something to take the banner of the U.S. equity market in their hands, are the company MSCI Barra, calculated over 130 thousand different indices of worldwide electronic exchange NYSE Euronext, as well as agency Bloomberg.
Meanwhile, in financial circles in the U.S. wondering about the possible change of name of the main American stock index. "It will be hard to imagine that the Dow Jones would be called something else - said in an interview with Bloomberg manager of Hodges Capital Management Investment Fund, Eric Marshall. - 30 largest U.S. companies united into a single index seems to exist forever. When someone asks you: "Well, as there the market?" - you reply: "I went up to 100 points, automatically referring to the index of Dow Jones".
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