This "Financial Focus" column is prepared by Edward Jones Investments, headquartered in St. Louis. Jones includes branches throughout the nation, including Cape Girardeau and Jackson.

In mid-March, the editors of The Wall Street Journal announced the replacement of four stocks in the Dow Jones Industrial Average, which was one of the largest changes to the DJIA in its history.

When trading opened Tuesday, Travelers Group replaced Westinghouse Electric Corp., Hewlett-Packard Co. replaced Texaco Inc., Johnson & Johnson replaced Bethlehem Steel Corp., and Wal-Mart Stores Inc. replaced Woolworth Corp.

Why were these changes made? For the answer to that, you need to know the history of the Dow.

Charles Dow developed the Dow Jones Industrial Average in 1884 to provide investors with a market barometer. The DJIA is based on a formula that adds the price of all stocks listed in the DJIA, then divides the sum by a divisor that takes into consideration such occurrences as stock splits. The divisor is published daily in The Wall Street Journal. The resulting number is the Dow Jones Industrial Average.

The DJIA offers a simple way to track market highs and lows over any period of time. Armed with this information, investors can better anticipate market performance.

Because the market is so closely tied to the health of the U.S. economy, Charles Dow chose companies whose stocks would mirror the economy's health. In 1884, manufacturing was the U.S. economy, so Dow selected 11 manufacturing stocks.

Over the years, the DJIA has grown to include 30 stocks, and the economy has grown to include numerous sectors in addition to manufacturing. The four stocks added to the Dow in March will expand its representation of the technology, finance and health-care industries, all of which have a major impact on the economy.

For example, consider the replacement of Westinghouse Electric Corp. with Travelers Group. Over the past few years, Westinghouse has dramatically swung its business focus toward the broadcasting industry. In fact, Westinghouse plans to spin off its industrial operations later this year and become a broadcasting company. The Dow is already well represented in this sector by General Electric, which owns NBC and Disney Co., which in turn owns ABC.

Travelers Group, on the other hand, represents the finance industry. It is the offspring of the brokerage and commercial-finance company Primerica Inc. and the insurance company Travelers.

The last change to the Dow occurred in May 1991, when three stocks were replaced. The largest change ever -- other than when the Dow was increased from 12 to 20 stocks in 1926 and then to 30 stocks in 1928 --occurred in May 1932, when eight stocks were changed.

Changes to the Dow are determined by The Wall Street Journal editors, who don't change it often. As one editor recently explained, the DJIA isn't a "hot stock" index. It is intended to provide a barometer for the market by reflecting the economy's health. The stability of the index enhances the trust many people have in the Dow Jones Industrial Average.

The Southeast Missourian does not recommend that readers buy or sell stocks featured in this column, which is provided for informational purposes only.