Crossword Dictionary
dow jones
The Dow Jones Industrial Average (DJIA), Dow Jones, or simply the Dow, is a stock market index of 30 prominent companies listed on stock exchanges in the United States.
Although the DJIA is one of the oldest and most commonly followed equity indices, many professionals consider it to be an inadequate representation of the overall U.S. stock market compared to a broader market index such as the S&P 500. The DJIA includes only 30 large companies. It is price-weighted, unlike stock indices which use market capitalization.
The value of the index can also be calculated as the sum of the stock prices of the companies included in the index, divided by a factor which is currently (as of November 2021) approximately 0.152. The factor is changed whenever a constituent company undergoes a stock split so that the value of the index is unaffected by the stock split.
Dow Jones & Company, a financial news publisher founded by Charles Henry Dow and Edward D. Jones, began computing a daily industrials average in 1896, using a list of 12 stocks and dividing their total price by 12. The list of stocks has since been broadened, and the divisor has been adjusted to compensate for stock splits, stock substitutions, and significant dividend changes. Thus, the averages are not arithmetical means but averages meant to indicate general market price trends.
The most commonly quoted is the Dow Jones Industrial Average (DJIA), which is based on the prices of 30 industrial stocks. Other Dow Jones averages include the Dow Jones Transportation Average (DJTA), based on 20 transportation stocks; the Dow Jones Utility Average (DJUA), based on 15 utility stocks; the Dow Jones Composite Average, comprising the stocks of the DJIA, DJTA, and DJUA; and several bond averages. Other popular gauges of the American securities markets are the S&P 500 and the Russell 2000 indexes.