2007-08-09 11:41:09 · 6 answers · asked by Anonymous in Business & Finance ➔ Investing
The Dow Jones originally consisted of 30 stocks that were considered a representation of the stock market as a whole. The price of each stock was added and the total divided by 30 to get the DJIA (Dow Jones Industrial Average). When the market as a whole went up, the Dow went up. When the market went down, the Dow went down. Over the years, the individual stocks have changed and the formula has been adjusted from a simple average, but the theory remains the same. Other indexes have also been developed that include a larger sample of stocks. The NASDAQ (National Association of Securities Dealers Automated Quote?) and the S & P 500 (500 stocks selected by Standard & Poors) are 2 of the more well know.
2007-08-09 12:06:26 · answer #1 · answered by STEVEN F 7 · 0⤊ 0⤋
The Dow Jones is a folder of stocks from several high profile companies. The gain/loss is the average gain/loss from all those companies.
When they lose more than they gain, the Dow is down. If they gain more than they lose, the dow is up. It's a general indication of how the sotck market is doing in general.
The Dow Jones average doesn't have anything to do with the performance of a particular company's stock.
It's like saying "People in the USA are financiall worse off this year than they were last year." You may, in fact, be better off than you were last year. It's just a broad average.
2007-08-09 18:46:13 · answer #2 · answered by Let me steer you 7 · 0⤊ 0⤋
The Dow Jones is a stock index: it averages out the stock prices of a bunch of carefully selected large U.S. companies. These companies and their financial success is supposed to reflect the general success of the U.S. economy, or at least a portion of it. When the companies do well, their stock prices go up, and the Dow Jones index goes up, and vice versa.
2007-08-09 18:45:49 · answer #3 · answered by teresathegreat 7 · 0⤊ 0⤋
the dow is the oldest index for tracking the stock market. it only follows the thirty largest companys traded vs. the s&p 500 hundered tracks the five hundred most traded companys. when there are gains in the market it is up. when there are losses it is down.
2007-08-09 18:47:32 · answer #4 · answered by jason m 1 · 0⤊ 0⤋
You could say it's a reflection on people's moods. Like for instance when Bush leaves office it will skyrocket for a few days, then fall when the bills for his Iraq disaster keep coming in..
2007-08-09 18:46:54 · answer #5 · answered by Anonymous · 0⤊ 1⤋
When it's up buyers beat out sellers, when it's down sellers beat out buyers.
2007-08-09 18:44:40 · answer #6 · answered by cireengineering 6 · 1⤊ 1⤋