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). also called Dow Jones Industrial Average (DJIA).

Use Dow in a sentence

When someone makes the statement 'The market is up today', this person is very likely referring to the Dow Jones Industrial Average.

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When purchasing stocks or bonds, for investing in your future, it is suggested that you follow the DOW average before making any final decisions.

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The Dow gets mentioned in the new a lot, but the S&P 500 is generally considered a more accurate index for measuring how the American stock market as a whole is doing.

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