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Dow Jones Formula Changed Often in 1997
According to an article in the January 5th issue of The Wall Street Journal, the year 1997 was a particularly active one for the formula used to calculate the Dow Jones Averages. The Dow Jones Industrial Average was reformulated 13 times between January 2nd and December 19th.
According to the Journal (which is published by Dow Jones & Company) the averages (including the Transportation Average and Utility Average) are calculated by adding together the closing prices on the New York Stock Exchange and dividing the sum by the appropriate divisor. Stock splits, spinoffs, and related activities cause the divisor to become smaller. During 1997 the divisor for the Industrial Average progressively decreased from 0.32514560 to 0.25089315. A $1 change in the price of stock in the Dow Jones Industrial Average raises or lowers the average by about 4 points.
The most notable change in the Industrial Average occurred on March 17th, when four stocks were removed from the Industrial Average and replaced by four others. Westinghouse Electric Corp., Texaco Inc., Bethlehem Steel Corp., and Woolworth Corp. were replaced by Travelers Group Inc., Hewlett-Packard Co., Johnson & Johnson, and Wal-Mart Stores Inc. The percent change in price during 1997 for these corporate stocks were: Westinghouse (merged with CBS), Texaco (+10.8), Bethlehem Steel (-2.1), Woolworth (-7.4), Travelers Group (+78.1), Hewlett-Packard (+24.38), Johnson & Johnson (+32.41), Wal-Mart (+72.4). According to the Journal report, the three stocks in the Dow Jones Industrial Average with the highest percent price gain (Travelers Group, Wal-Mart, and American Express) are not industrial corporations. The article appears on page B9A.
Womens' Breast Self-Exam Data...How Valuable?
A "Science Times" article in the January 6th issue of The New York Times questions the value of womens' breast self-examinations. Millions of American women routinely perform breast self- examinations, typically once a month. The procedure has been endorsed by the American Cancer Society for decades.
But, according to the Times, breast self-examination has become one of the most disputed issues in preventive medicine. Before mammography became widely used in the 1980's, breast cancer was routinely diagnosed by touch. A doctor found a lump in a woman's breast or a woman found one herself. Even today, a significant proportion of breast cancers are found on self-exam, especially in women under 50. Unfortunately, it appears that the complex biology of breast cancer and problems with self-examination itself make self-examination a weak predictor of early breast cancer. Often, women use poor self-examination techniques. Tumors found on self-examination are much larger than tumors found on mammography. Often, women are too fearful to do breast self-examination at all.
Several studies suggest that breast self-examination may save lives, but only in women using good techniques. One large self-examination study is being conducted in China, but the results may not apply to American and Canadian women, since mammography is unavailable in China and the breast cancer rate is lower there. The article was written by Abigail Zuger and appears on page C1.