DJIA

DJIA

See Dow Jones Industrial Averager.

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Dow Jones Industrial Average (DJIA). The Dow Jones Industrial Average (DJIA), sometimes referred to as the Dow, is the best-known and most widely followed market indicator in the world. It tracks the performance of 30 blue chip US stocks.

Though it is called an average, it actually functions more like an index. The DJIA is quoted in points, not dollars. It's computed by totaling the weighted prices of the 30 stocks and dividing by a number that is regularly adjusted for stock splits, spin-offs, and other changes in the stocks being tracked.

The companies that make up the DJIA are changed from time to time. For example, in 1999 Microsoft, Intel, SBC Communications, and Home Depot were added and four other companies were dropped. The changes are widely interpreted as a reflection of the emerging or declining impact of a specific company or type of company on the economy as a whole.

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Dow Jones Industrial Average

What Does Dow Jones Industrial Average Mean?

The Dow Jones Industrial Average is a price-weighted average of 30 stocks traded on the New York Stock Exchange and the Nasdaq. The DJIA was invented by Charles Dow in 1896.

Investopedia explains Dow Jones Industrial Average

Often referred to as “the Dow,” the DJIA is the oldest and most watched index in the world. The DJIA includes companies such as General Electric, Disney, Exxon, and Microsoft. When the TV networks say that “the market is up today,” they generally are referring to the Dow.

Related Terms:
• Benchmark
• Nasdaq
• New York Stock Exchange—NYSE
• Standard & Poor's 500 Index—S&P 500
• Stock Market