Define: Dow Jones Composite Index

UK Accounting Glossary

Definition: Dow Jones Composite Index



Advertisement



Full Definition of Dow Jones Composite Index


The Dow Jones Composite Index is a stock market index comprised of the constituents of the Dow Jones Industrial Average, the Dow Jones Transportation Average, and the Dow Jones Utility Average. The Dow Jones Composite Index is weighted by stock price and quoted in points. To calculate the Dow Jones Composite Index, first the stock prices of the 30 Dow Jones Industrial Average stocks, 20 Dow Jones Transportation Average stocks, and 15 Dow Jones Utility Average stocks are added and divided by 65. That number is then multiplied by a divisor, which compensates for adjustments such as stock splits and substitutions to the index. This figure results in the final value of the Dow Jones Composite Index. The first component of the Dow Jones Composite Index, the Dow Jones Transportation Average, was formulated in 1884 and the second (i.e. Dow Jones Industrial Average) in 1896 by Wall Street Journal editor Charles Dow and statistician Edward Jones. The third component of the Dow Jones Composite Index, the Dow Jones Utility Average, was created in January 1929. The Dow Jones Composite Index itself was created five years later. The Dow Jones Composite Index is also known as the Dow Jones Composite Average.


Advertisement




Cite Term


To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
https://payrollheaven.com/define/dow-jones-composite-index/
Modern Language Association (MLA):
Dow Jones Composite Index. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. February 25, 2020 https://payrollheaven.com/define/dow-jones-composite-index/.
Chicago Manual of Style (CMS):
Dow Jones Composite Index. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/dow-jones-composite-index/ (accessed: February 25, 2020).
American Psychological Association (APA):
Dow Jones Composite Index. PayrollHeaven.com. Retrieved February 25, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/dow-jones-composite-index/

Definition Sources


Definitions for Dow Jones Composite Index are sourced/syndicated and enhanced from:

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

This glossary post was last updated: 9th February 2020.