dow
Shorthand for the Dow Jones Industrial Average, a stock market index of 30 major American companies.
Example
“The Dow fell 300 points today on concerns about rising inflation.”
Memory Tip
The DOW = Charles DOW's index. When people say 'the Dow is up,' they mean those 30 companies.
Why It Matters
The Dow serves as a barometer for the overall health of the American economy and stock market. Many people use it to gauge whether the economy is doing well or poorly, making it important for investment decisions and understanding economic news.
Common Misconception
People often think the Dow represents the entire stock market, but it only tracks 30 large companies. There are thousands of other publicly traded companies, and the Dow can move differently than the broader market as a whole.
In Practice
If you hear on the news that the Dow dropped 500 points in a day, this means the average value of those 30 companies fell by approximately 500 points. An investor with money in an S&P 500 index fund might see a different percentage change because that fund tracks 500 companies instead of just 30.
Etymology
Named after Charles Dow, co-founder of Dow Jones & Company and the Wall Street Journal.
Common Misspellings
Track markets & get real-time stock data
Related Terms
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