20050606 asloan
Allan Sloan - 

SCOTT JAGOW: Now, even though the Dow had its worst week since August, Wall Street did set a significant record last week. We asked Newsweek's Allan Sloan to explain it.

ALLAN SLOAN: What's now called the Dow-Wilshire 5000, which is the broadest measure of the U.S. stock market, finally hit a record close for the first time since March of 2000. And except for me and I guess the people at Wilshire, nobody cared. It's just hilarious.

JAGOW: Why doesn't anybody care?

SLOAN: Because nobody cares about the Wilshire. The oldest stock-market indicator we have are the Dow Industrials, which date back to, I believe, 1896 or 1898. Then there's the S&P 500, which is what everybody uses for comparative purposes — real analysis. And that really dates back in its modern form only about 50 years. And the Wilshire started in 1970. So, even though the Wilshire is by far the best indicator, by the time it appeared, the Dow had captured, I would say, about 96 percent of the public mind share. If you woke me up in the middle of the night and said, "Allan, how's the market doing?" I would answer with the Dow.

JAGOW: So, the Wilshire is all of the stocks that are traded on the American exchanges?

SLOAN: Yeah, it's all of the stocks, based in the United States, that are publicly traded. So, you know, some of the stocks on U.S. exchanges are foreign stocks. But it's every U.S. stock that's publicly traded and has a reasonably ascertainable stock-market value. The Wilshire is really the only thing that is THE market, because it's the whole market. And the Dow is an average picked by two guys — Dow, Jones — and the S&P is picked by a committee at Standard & Poor's. And, by the way, last Tuesday, even though the Wilshire hit a high, the S&P 500 was still about 4 percent below its high.

JAGOW: So, even though there was a bit of a dip at the end of the week, we can still play the happy music just for the Wilshire.

SLOAN: Right. And you have my permission to be officially upbeat.

JAGOW: OK. Thanks, Allan.

SLOAN: You're welcome, Scott.

JAGOW: Allan Sloan is the Wall Street editor for Newsweek magazine.