Who cares about the DOW?

I guess you knew who created that index and for what purpose it was created. Unless S&P500 has a totally different way of measuring and view the stock market from the DOW, and then it will be a good reason to replace the DOW by S&P500. So why should we replace something by an offspring that share the same characteristic?

As an example, SBC was derived from AT&T and when SBC acquired his parent, they preferred to keep the parent's name (and I think they made a good choice), not the child's name.

Quote from jonbig04:

Out of curiosity, why do news agents, people, business channels etc all follow and quote the DOW? Isn't the S&P a far broader picture of our economy as a whole (which is always what they are talking about). I'm sure there are some advantages to the DOW, but in macro terms, shouldn't they be more concerned with the S&P? I don't care, just something I was always curious about.
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Maybe the Dow just makes for better news. The components are household names and manageable in number and can be commented on individually.
 
So let's summarize it :

1. Tradition.

2. Historical comparison, even if missleading. You can look up the Dow 100 years ago, you can't do that with other indeces.

3. Why change it? They behave the same most of the time so it makes little difference if the news refer to this or that index and people are familiar with the Dow.

4. Psychological reasons. It just sounds better that the Dow rallied 300 points than the S&P rallied 30 points.

5. Explanation factor. It is easier to understand that 1-2 components pulled down/rallied the other 28, then saying the same about 500 companies...

6 Sounds better and cooler then ass and pee. Also shorter, since there is an S&P 100, so they always have to mention that they refer to the 500...

7. Just because....

...and 1 extra reason, the WSJ is owned by the Dow Jones publishing company. :)
 
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