Does the Dow Matter?

NPR's weekday newscasts air 37 times a day and usually include stock market figures.
But are those numbers valuable to the average listener?

"As a data bit for a civilian audience the Dow is flat out useless at best," wrote Tom DeVries from Mariposa, CA. "Of course the people who actually do know what it all means keep track minute by minute and don't need NPR to tell them."

The Ombudsman regularly hears from people with similar concerns. Some wonder what exactly it means when a newscaster says "the Dow fell 10" or "jumped 25 points today."

NPR gives Wall Street futures and foreign markets before Wall Street opens at 9:30 a.m. After that point, NPR reports the Dow Jones industrial average and gives closing numbers into the evening. The S&P 500 and Nasdaq indexes also make it into the mix.

The coverage is so consistent many listeners might not give it a second thought. "It's been done since the dawn of time," said Robert Garcia, executive producer of newscasts, "which for us was in the 1970s."

NPR predominantly reports on the Dow, a stock market index established in 1896. It averages the stock market value of 30 large, publicly-owned U.S. businesses. Some listeners argue it is not as relevant as the S&P 500, which began in 1957 and averages the value of 500 companies.

"They're not that different in their up and down swings," Garcia said, adding that the Dow is still widely recognized as a major indicator of economic health.

NPR reports stock market indexes for two reasons — one of which has little to do with journalism.

The first is that stock market information is important to listeners — especially the millions of people with investments and 401Ks, said Jonathan Kern, former executive producer of All Things Considered.

"Investors are interested in these numbers every day," he said. "If you're interested in the stock market we want you to know you can get it here."

It's true. If a newscaster leaves out a stock market update, NPR hears about it.

"Today's three-minute noon news broadcast omitted any mention of the Dow and Nasdaq indices," wrote Gordon Daiger from Bethesda, MD. "The market indices are a matter of considerable interest in your listening audience. What is the problem giving rise to the omissions?"

The second reason is technical and reveals some of the "mystery" behind the workings of NPR's newscasts.

Stock market indexes help newscasters "hit the post," or finish speaking at exactly the right second. For example, some newscasts begin at one minute after the hour. Three minutes later they break so local stations can air their own newscasts (many stations continue with the NPR newscasts, however). The timing must be exact or the newscaster will either be cut off abruptly or speak over the local announcers.

The Dow "is copy that gives them flexibility," Garcia said. Reading the Dow and Nasdaq helps newscasters "hit the post" because they can read as little as 5 seconds or as many as 15 seconds before signing off.

Local stations often use weather and traffic updates as similar fillers since the length can be easily changed. With a national audience, NPR has to use something relevant nationwide, Kern said, and that includes the stock market.

Journalistically, however, the way NPR uses the figures is not perfect.

"Because we use it as filler there is no proportion for how much time we give it," Kern said. Sometimes big news in the stock market will only get a little air time and a slower day could get much more. "You wouldn't treat any other story that way," he said.

Including numbers without context is another possible problem. To rectify this, Garcia encourages newscasters to include a line of context as to what might be driving the numbers. In the current economy, for example, the markets often rise or fall on the basis of the government's latest economic reports. The amount of context included depends on how much time newscasters have.

Newscaster Jean Cochran, who joined the network in 1981, believes it's useful to give the Dow, S&P 500 or Nasdaq figures.

"All in all, I think people like the little factoid of what the market's doing," Cochran wrote. "Either it's doing nothing much...and that's comforting. Or it's gyrating...and it's really news."

— Lori Grisham
Assistant to the Ombudsman

Curious about the Dow? For a concise explanation, read Joe Bel Bruno's Finance 101 article from The Seattle Times.

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