The Dow Jones Industrial Average is once again flirting with 13,000, a truly historic milestone. Or at least it was when the Dow first hit the mark on April 20, 2007. This was, of course, a mere three months before the index would hit 14,000 for the first time on July 16th. While the collapse of the housing market meant that the Dow’s historic gains that summer wouldn’t last, it’s still interesting to take a look back at Wall Street’s most famed index and where the country was when each new threshold was reached.
0: May 26, 1986
The Dow Jones Industrial Average was founded on May 26, 1896 by Charles Dow and Edward Jones. Dow was a journalist who also founded the Wall Street Journal, and he worked with Jones, a statistician, to create the index of the largest companies in the United States. Dow was interested in studying market movements and would ultimately become the father of technical analysis.
Dow had previously created a list of companies called the Dow Jones Averages, which included nine railroads and two industrial companies in 1884. The new Dow Jones average was expanded to include 12 total stocks with no railroads. Only one company that was a part of this list remains a part of the Dow Jones Industrial Average: General Electric (GE).
The index started at 40.94 but soon dropped to its all-time low of 28.48.
1,000: January 18, 1966
Look out for this one on future episodes of Mad Men on AMC. The country was in the midst of a major transformation in 1966, poised between the simpler days of the mid-1960s and the turbulent end of the decade when the Dow first hit quadruple digits. It took some 70 years to get to the first 1,000, but the rate of expansion would get much quicker from there.
2,000: January 7, 1987
The Dow would first break the 2,000 mark for the first time early in 1987, a year that would become notorious in retrospect for its excesses in the market. The year 1987 would prompt a massive growth in the Dow, reaching 2722.42 before Black Monday on October 19 would result in a massive drop. October is historically not a great month for the Dow, with Black Thursday in 1929 falling on October 24.
3,000: July 13, 1990
It took the Dow 70 years to reach 1,000, and another 11 years to get to 2,000, but the dominoes start falling harder and faster after that. The 1990s started in a recession, but the end of the decade would ultimately bring unforeseen new heights for the index.
4,000: January 31, 1994
With the country emerging from the harder times of the early 1990s, the Dow Jones starts to grow at a dramatic rate throughout the economic expansion of the 1990s.
5,000: November 16, 1995 – 11,000: April 28, 1999
- 6,000: October 4, 1996
- 7,000: February 13, 1997
- 8,000: July 8, 1997
- 9,000: April 2, 1998
- 10,000: March 12, 1999
The late 1990s prompted unprecedented growth in the Dow Jones. While the markets as a whole were primarily driven by the growth of the internet and tech companies, the industrial companies making up the Dow Jones clearly benefited as well. The dot-com bubble hit its peak in May of 2000, but that was after the Dow Jones gained 315 percent over the course of the decade.
12,000: October 13, 2006 – 13,000: April 20, 2007
After the rapid growth of the 1990s, it would take the market seven more years of ups and downs before solidifying gains and reaching its next benchmark. Unfortunately, these gains, in retrospect, appear to have been driven by the housing bubble’s rapid expansion.
14,000: July 16, 2007
As stated above, the Dow’s all time high came at a relatively unstable time and it could be some time before the index returns to those heights. However, the the index is once again flirting with 13,000 at a time when the economy appears to be rebounding. Perhaps a recovery in the jobs and housing market could mean that the 15,000 level isn’t as distant in the future as it may have seemed.
Either way, it’s hard to say whether Dow and Jones could ever have envisioned their little index one day reaching where it is today. Incidentally, from 40.94 to 13,000 would be a gain of 317,537 percent.