# Average

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## Average

An arithmetic mean return of selected stocks intended to represent the behavior of the market or some component of it. One good example is the widely quoted Dow Jones Industrial Average, which adds the current prices of the 30 DJIA stocks, and divides the results by a predetermined number, the divisor.

## Average (across-day) measures

An estimation of price that uses the average or representative price of a large number of trades.

## Average

A simple way to calculate the relative price of an index of stocks that involves adding the prices of all the stocks in the index and dividing by the total number of stocks. Market averages may be weighted, for example, for price or market capitalization. Movements in the market average of an index are considered a way to observe trends in the health of the companies represented in it. Some market averages are taken as an indicator of health in the broader economy; prominent examples of this include the Dow Jones Industrial Average and S&P 500 indices.

See averages.

## Average.

A stock market average is a mathematical way of reporting the composite change in prices of the stocks that the average includes.

Each average is designed to reflect the general movement of the broad market or a certain segment of the market and often serves as a benchmark for the performance of individual stocks in its sphere.

A true average adds the prices of the stocks it covers and divides that amount by the number of stocks.

However, many averages are weighted, which usually means they count stocks with the largest market capitalizations more heavily than they do others. Weighting reflects the impact that the stocks of the biggest companies have on the markets and on the economy in general.

The Dow Jones Industrial Average (DJIA), which tracks the performance of 30 large-company stocks, is the most widely followed market average in the United States.

References in periodicals archive ?
Rates capped at double market average and can't be more than 12% higher.
Similarly, Business Week did a cover story on how the managers of stock portfolios hadn't beaten the market averages for three years in a row, with the majority doing much worse than the norm.
9 percent, nearly double the broader market average.
Citing revenue growth that exceeded the market average, the report also regarded Cartesis as well-positioned to challenge other leading vendors in the region.
Dashboard(SM) provides trend charts that display a customer's variance to the fuel market average for the last 15 and 30 days by state, fuel marketer, fuel type and the customer's organizational structure.
Cartesis has made substantial progress across Europe and North America and growth in 2005 based upon software revenues exceeded the market average.
Its range offer sits marginally below that of Superdrug, but with a total of 2,128 options it is more than 14% above the market average, and a leader of its grocery peer group.
Sainsburys leads the market in its Indian meal choice, providing a range of 45 options against Asdas 42, Tescos 40 and a market average of 26.
Quantum Growth is a simple, easy-to-follow service that gives an investor his best chance to trounce the market averages by using only common stocks," said publisher Michael Bell.
paper industry stocks more into line with market averages.
In the beginning of the fourth quarter of 2000, the Dow Jones industrials were down more than 6%; other major market averages also were under water.
While the largest producers had a fifth straight year of gains, the group trailed the integrated oils and broad market averages by a wide margin, lagging for the first time since 2001.

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