Business, Legal & Accounting Glossary
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. 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). also called Dow Jones Industrial Average (DJIA).
The term “Dow” is usually used to mean the Dow Jones Industrial Average, an index of thirty blue-chip stocks that serves as the most widely used measure of the U.S. stock market. The term carries much weight in the stock market due to its popularity as a market index. To calculate the Dow, the trading prices of the thirty stocks are added up and divided by a special divisor that is weighted to account for stock splits and other conditions. There are several other indices with the Dow name: the Dow Jones Utilities Average, the Dow Jones Transportation Average, and the Dow Jones Composite Average, to name a few. Dow also refers to Dow Jones & Company, a major source of financial news. This company publishes the Wall Street Journal, the largest business and finance publication in the world. The company was founded by Charles Henry Dow, Edward Davis Jones, and Charles Milford Bergstresser in 1882.
When someone makes the statement ‘The market is up today’, this person is very likely referring to the Dow Jones Industrial Average.
When purchasing stocks or bonds, for investing in your future, it is suggested that you follow the DOW average before making any final decisions.
The Dow gets mentioned in the new a lot, but the S&P; 500 is generally considered a more accurate index for measuring how the American stock market as a whole is doing.
Dow Jones Industrial Average, Dow Jones, Dow Jones Average
trading effect
Dow Jones Sustainability World Index
Dow Jones Transportation Average (DJTA)
Dow Jones Wilshire Large Cap Index
Dow Jones Utility Average (DJUA)
Dow Jones Asian Titans 50 Index
Nikkei Stock Average
Dow Jones Wilshire Mid Cap Index
Dow Jones Averages
Dow Jones BRIC 50 Index
Dow Jones & Company
down
downtick
down market
Dow Jones Industrial Average (DJIA) yield
run down
down volume
top-down
bring down
down time
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This glossary post was last updated: 30th October, 2021 | 0 Views.