What Is The DOW?

The DOW

The DOW is the common name used to represent the Dow Jones Industrial Average (DJIA).  The DOW is quite possibly the most well-known stock market indices and certainly the oldest.  Formed in the late 1800´s by stock market guru and Wall Street Journal editor Charles Dow and his partner a statistician, Edward Jones, the DOW is an average of 30 companies and their stock value performance.  The companies included in the DOW in times past consisted of heavy industry, such as oil, rail, and steel conglomerates.  These days the companies are less industrial but solid performers in their industries, well-known solid companies.  The performance of these companies is key as the DOW only represents an average of how they are doing.  In this way the stock market value of the 30 companies included in the Dow Jones Industrial Average are combined, divided by a divisor to account for any stock splits or other nominal changes to maintain the DOW extremely accurate as a representative figure of the stock market.

Companies Included In DOW

Being included in the DOW index is obviously quite prestigious.  It says that the company is not only an industry leader, but a good enough performer in the stock marketplace to serve as an average for total.  It is this average that the whole world is watching to see where the market it going.  So when the DOW drops below 10,000 and the collective investment world holds their breath, it is really that only these 30 companies are performing poorly.  These 30 companies however are chosen so carefully and combined are so mathematically representative as a share of the overall stock market that the DOW works to predict and assess how the world market is generally doing.  The following companies are included in the Dow Jones Industrial Average:

Related posts:

1. What Is The NASDAQ?
2. What Is In A Stock Report?
3. What Is Over The Counter Trading?
4. What Is The Most Common Stock?
5. What Is A Blue Chip Stock?