DJIA

Definition

The Dow Jones Industrial Average (DJIA) is a stock market index that measures the stock performance of 30 prominent companies listed on stock exchanges in the United States. It is one of the oldest and most widely recognized indices in the world, often used as a barometer for overall market health.

5 Must Know Facts For Your Next Test

1. The DJIA is a price-weighted index, meaning stocks with higher prices have more influence on the index's movements.
2. It was created by Charles Dow and Edward Jones in 1896.
3. The DJIA includes companies from various sectors, excluding transportation and utilities.
4. Changes in the DJIA can influence investor sentiment and market trends.
5. The DJIA does not account for market capitalization, unlike other indices such as the S&P 500.

Review Questions

• What type of weighting method does the DJIA use?
• Who were the founders of the DJIA?
• How many companies are included in the DJIA?

Related terms

S&P 500: A broader stock market index that includes 500 of the largest publicly traded companies in the U.S.

NASDAQ Composite: A stock market index that includes over 3,000 stocks listed on the NASDAQ exchange.

Market Capitalization: The total value of a company's outstanding shares of stock, calculated by multiplying the current share price by the total number of shares.