DJIA
Definition
Dow Jones Industrial Average. The most widely used indicator of the overall condition of the stock market, a price-weighted average of 30 actively traded blue chip stocks, primarily industrials. The 30 stocks are chosen by the editors of the Wall Street Journal (which is published by Dow Jones & Company), a practice that dates back to the beginning of the century. The Dow was officially started by Charles Dow in 1896, at which time it consisted of only 11 stocks. The Dow is computed using a price-weighted indexing system, rather than the more common market cap-weighted indexing system. Simply put, the editors at WSJ add up the prices of all the stocks and then divide by the number of stocks in the index. (In actuality, the divisor is much higher today in order to account for stock splits that have occurred in the past.)
Use DJIA in a sentence
“ You may want to keep a close eye on the DJIA even if you don't invest so you can know how the economy is doing. ”
“ The DJIA was used as the primary measuring stick to compare our stock portfolio to, this was mentioned during the meeting. ”
“ When the economic recession hit, it was clear that the DJIA was plummeting and showing indicators that a resurgence to the former strength was going to take a very long time. ”
