Dow Jones industrial average |
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The Dow Jones Industrial Average (NYSE: DJI, also called the DJIA, Dow 30, or informally the Dow Jones or The Dow) is one of several stock market indices, created by nineteenth-century Wall Street Journal editor and Dow Jones & Company co-founder Charles Dow. It is an index that shows how certain stocks have traded. Dow compiled the index to gauge the performance of the industrial sector of the American stock market. It is the second-oldest U.S. market index, after the Dow Jones Transportation Average, which Dow also created.
The average is computed from the Dow Jones Indexes by the stock prices of 30 of the largest and most widely held public companies in the United States. The "Industrial" portion of the name is largely historical. Many of the 30 components have little or nothing to do with traditional heavy industry. The average is price-weighted, and to compensate for the effects of stock splits and other adjustments, it is currently a scaled average. Not the actual average of the prices of its component stocks, but rather the sum of the component prices divided by a divisor, which changes whenever one of the component stocks has a stock split or stock dividend, so as to generate the value of the index. Since the divisor is currently less than one, the value of the index is higher than the sum of the component prices.
The Dow Jones Industrial Average consists of the following 30 companies: