On this day in economic and financial history…
Two American economic bellwethers began their tenure on the Dow Jones Industrial Average on March 12, 1987. That day, Coca-Cola and Boeing both became part of the Dow, replacing glassmaker Owens-Illinois and Inco, a nickel-focused miner. A spokesman for the Dow Jones company noted that Inco’s removal was intended to make the index more representative of the market — the Dow had counted four metals companies (including two steelmakers) on its roster of 30 prior to the change. Owens-Illinois was removed in preparation for a pending leveraged buyout from Kohlberg Kravis Roberts.
It was the second time around on the index for both companies. Coke had been part of the Dow from 1932 to 1935. Boeing had been a member from 1930 to 1932 after founder William Boeing brought his company together with other leading aviation concerns to create the United Aircraft and Transport Company, a de facto American aviation trust. This time, the addition proved more durable — and plenty valuable, to boot. In the 25 years following Coke and Boeing’s addition, the Dow grew 470%, but Boeing put up a total return of 900%, while Coke thrashed the index with a massive 3,000% total gain.
You can’t keep these gains bottled up
Coke had another important milestone on March 12, nearly a century before it joined the Dow. The legendary soft drink, in most popular accounts, was first sold in bottles on March 12, 1894, eight years after it was invented by an Atlanta pharmacist. In its earliest years, Coke was sold as a patent medicine (owing to its pharmacy origins), but once the formula passed into the hands of Asa G. Candler, it began to take on the business model of a modern soft drink. There is some debate as to the exact date of the first sale of bottled Coke, but the use of bottles helped Coke expand nationally before refrigeration entered widespread use. The contour bottle, which is still used today with some modern variation, was introduced in 1916, shortly before Candler sold the business.
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Dow on the rise
The Dow also saw another milestone on March 12. The index first broke through the 500-point barrier on March 12, 1956 to close at 500.24 near the end of one of the longest and strongest bull markets in its history. President Dwight Eisenhower‘s re-election seemed relatively assured, and a streak of strong earnings reports and high dividend payouts also contributed to investor enthusiasm, although The Washington Post …read more
Source: FULL ARTICLE at DailyFinance