What Is the Dow Jones Industrial Average?
Today we are going to talk about the Dow Jones Industrial Average. What is the Dow Jones Industrial Average? The Dow Jones is a stock market index. It has been around since 1896. The Dow Jones index shows how 30 large public companies trade during a session. The Dow Jones index gives an investor or trader a picture of what the overall United States market is doing on a particular day.
To give an example of how the Dow Jones works we will turn to the manufacturing industry. In the manufacturing industry a product is built. Many companies will have quality checks on a certain number of products. If they make 500 widgets in a day they may check 30 for quality defects. The 30 widgets are a sample. With a good sample size a manufacturing plant can tell what is going on with the widgets.