The Dow Jones Industrial Average was founded in 1896, by Charles Dow, as a way of deciphering the stock market. At that time it represented the dollar average of 12 stocks belonging to some of America's leading industries.
Prior to the DJIA, Mr. Dow had comprised a list of nine railroads and three industrial companies who's averages appeared in the Customer's Afternoon Letter, which later became the Wall Street Journal. Of the original 12 stocks only General Electric made it to the DJIA and the new list became solely industrial companies.
Today the DJIA is touted as the best indicator of how the stock market is doing. The DJIA is comprised of thirty blue chip stocks that are traded in the United States. Blue chip stocks are stocks offered by large, national companies, that maintain solid growth records and stable earnings. Some of the oldest companies to hold their place in the DJIA are General Electric (1907), Exxon Mobil (originally Standard Oil) (1928) and Dupont (1935). Some of the newer additions to the DJIA are Kraft Foods (2008) Cisco Systems (2009) and Travelers Insurance (2009).