Dow Jones Industrial Average

Definition

DJIA. 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.)

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You should try and follow the dow jones industrial average so you know how the economy is doing at the time.

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Any novice investment wonk would know to study the Dow Jones Industrial Average to get their feet wet in stock market analysis.

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He didn't see what happened to his individual stocks on the day the markets crashed, but he was certain it wasn't good when he heard how much the dow jones industrial average fell by.

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