Dow jones definition stock market

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The Dow Jones Industrial Average DJIA , often referred to as the "Dow Jones" or simply as "the Dow," is a price-weighted average of the stocks of 30 large American publicly traded companies.

Dow Jones Industrial Average (DJIA)

Created by Charles Dow in , it is the most well-known U. In a nutshell, a price-weighted index means that higher-priced stocks have more influence over the index's performance than lower-priced ones.

In the case of the Dow Jones Industrial Average, the prices of all 30 stocks in the index are added together and then divided by the "Dow divisor," which changes over time due to stock splits and other events. The divisor is much less than one, which is why the value of the index is greater than the sum of the stock prices.

As of the most recent adjustments, which went into effect after the market's close on March 18, , here are the 30 stocks that currently make up the DJIA, listed in alphabetical order. It's worth noting that these components change frequently. Apple, Goldman Sachs, Nike, and Visa have all been added to the index within the past three years.

Also, only one of the Dow's original 12 components General Electric from remains on the index today. Although it's the top number you see when you look at any stock market coverage, there are some shortcomings to the Dow Jones Industrial Average. Most obviously, the Dow Jones only includes 30 stocks.

Dow theory - Wikipedia

There are more than 5, common stocks that trade on the NYSE and Nasdaq , so the Dow 30's performance may not be the best indicator of how the overall market is doing. Also, the price-weighting means that some of the Dow components have much more influence on the index than others. Therefore a move in Goldman Sachs' share price would have more than four times the effect of a similar percentagewise move in Pfizer.

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The Meaning of the Dow Jones Industrial Average - The Simple Dollar

Personal Finance Credit Cards Best Credit Cards of Best Credit Card Sign-Up Bonuses Best Balance-Transfer Credit Cards Best Travel Credit Cards Best Cash-Back Credit Cards Best No-Annual-Fee Credit Cards Best Small Business Credit Cards. What Is the Dow Jones Industrial Average?

The Dow is the most recognized stock index in the U. What is a price-weighted index? The current "Dow 30" As of the most recent adjustments, which went into effect after the market's close on March 18, , here are the 30 stocks that currently make up the DJIA, listed in alphabetical order.

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