DJIA

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Definition: DJIA


DJIA

Quick Summary of DJIA


The most widely used indicator of the overall condition of the stock market, a price-weighted average of 30 actively traded blue-chip stocks, primarily industrials. The 30 stocks are chosen by the editors of the Wall Street Journal (which is published by Dow Jones & Company), a practice that dates back to the beginning of the century. The Dow was officially started by Charles Dow in 1896, at which time it consisted of only 11 stocks.




What is the dictionary definition of DJIA?

Dictionary Definition


The Dow Jones Industrial Average or simply the Dow is a stock market index that measures the stock performance of 30 large companies listed on stock exchanges in the United States.


Full Definition of DJIA


The DJIA (Dow Jones Industrial Average), also known as the Dow, is the oldest continuing US market index and most widely quoted stock market indicator.

The DJIA is a price-weighted average, meaning a $70 stock has more impact on the DJIA than a $30 stock. The DJIA is composed up of 30 large, well-known, industrial stocks that are generally industry leaders and trade daily on the New York Stock Exchange or Nasdaq. The DJIA is used as an overall indicator of market performance, but some criticize it for not being representative of the stock market as a whole due to its concentration in just 30 stocks. The DJIA is one of several stock market indices created by Wall Street Journal editor and Dow Jones & Company founder Charles Dow in 1896. Dow compiled the DJIA as a way to measure the performance of the industrial component of America’s stock markets. The DJIA is quoted in points, not dollars.

The Dow is computed using a price-weighted indexing system, rather than the more common market cap-weighted indexing system.
Simply put, the editors at WSJ add up the prices of all the stocks and then divide by the number of stocks in the index. (In actuality, the divisor is much higher today in order to account for stock splits that have occurred in the past.)


Examples of DJIA in a sentence


You may want to keep a close eye on the DJIA even if you don’t invest so you can know how the economy is doing.

The DJIA was used as the primary measuring stick to compare our stock portfolio to, this was mentioned during the meeting.

When the economic recession hit, it was clear that the DJIA was plummeting and showing indicators that a resurgence to the former strength was going to take a very long time.


Synonyms For DJIA


Dow Jones Industrial Average, Dow


Related Phrases


Dogs of the Dow
Nasdaq Composite Index
equity-indexed annuity
Crash of 1987
Dow Jones Industrial Average (DJIA) yield
Black Monday
Dow dividend theory
Dow Jones Industrial Average (DJIA) yield


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Definition Sources


Definitions for DJIA are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 29th October, 2021 | 0 Views.