![]() The difference in how the Dow weights its index can lead it to have more short-term ups and downs than market-cap-based indexes. ![]() These consider a company’s market capitalization when determining how much influence it will have in an index. ![]() The Dow’s approach is unlike other leading indexes used to track the overall performance of the stock market, like the S&P 500 or the NASDAQ. Because of this, companies with fewer expensive shares have a larger impact on the Dow’s value than companies with many cheaper shares. The DJIA’s price weighting does not account for market capitalization, which is the total market value of all of a company’s shares. This means that the Dow gives more weighting to companies with more expensive stock. International Business Machines Corporation Companies included in the Dow are referred to as components.Īs of January 2021, the following 30 companies are included in the DJIA:Ĭompanies in the DJIA Index Dow Components In the course of its lengthy history, its holdings have changed just 60 times, or about an average of every two years. The Dow’s composition does not change often. The only industries not currently included are transportation and utilities. The DJIA contains leading companies from many industries, including information technology, healthcare, and consumer discretionary. Because of the prominence of the companies in the Dow and the age of the index itself, experts and financial commentators often use its performance as shorthand to describe the overall stock market. These stocks are from large companies with long histories of strong performance. In its modern form, the Dow tracks the prices of 30 blue-chip stocks. stock market and global bond markets to the market for gold. There are indexes for almost everything, from the overall U.S. An index tries to model a particular industry or market-or even entire national economies. Indexes like the DJIA track the prices of a group of securities. The Dow Jones Industrial Average, also known as the DJIA or simply the Dow, is a stock index frequently used to gauge the overall performance of U.S. What Is the Dow Jones Industrial Average? Like the S&P 500, the DJIA is often used to describe the overall performance of the stock market. The DJIA is a stock index that tracks the share prices of 30 of the largest U.S.
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