dow jones
The Dow Jones Industrial Average (DJIA), a stock market index that tracks 30 large, publicly owned American companies.
Example
“The Dow Jones fell 500 points after the Federal Reserve raised interest rates.”
Memory Tip
The DOW is named after a person — Charles DOW. Think of it as Charles Dow's index of America's biggest companies.
Why It Matters
The Dow Jones Industrial Average serves as a barometer for the overall health of the U.S. economy and stock market. Many people use it to gauge whether their investments are performing well or to make decisions about saving and investing their money.
Common Misconception
People often believe the Dow Jones represents the entire stock market, but it only tracks 30 large companies. There are thousands of other publicly traded companies not included in this index, so a rising or falling Dow does not tell the complete story of market performance.
In Practice
If you owned stock in Apple, which is one of the 30 companies in the Dow Jones, and the index rose 500 points in a day, your Apple shares might have contributed to that movement. However, if the Dow fell 200 points on the same day, it could mean that the other 29 companies in the index declined enough to offset gains from Apple and other winners.
Etymology
Named after Charles Dow and Edward Jones, who founded Dow Jones & Company in 1882.
Common Misspellings
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