Tuesday, April 8, 2014

Dow Jones - Who or What is it?

Who or what is Dow Jones?
One of the largest business and financial news companies in the world is "Dow Jones & Company". Charles Dow, Edward T. Jones and Charles Bergstresser founded this company in 1896. The Wall Street Journal was founded by them in 1889, which remains one of the most influential financial publications.

Dow Jones Industrial Average (DJIA) can easily be confused with the Dow Jones. One of the most watched stock indexes in the world is the Dow Jones Industrial Average (DJIA), which is often referred to as "the Dow", containing companies like General Electric, Microsoft, Coca-Cola and Exxon. Many other indexes that represent different sectors of the economy are also owned by the Dow Jones (the company) along with the Dow Jones Industrial Average.

"How did New York do today?" you'll often hear people ask, in the world of finance,  or "How did the market perform today?". People are likely referring to the DJIA, in both cases, as above both the S&P 500 Index and the Nasdaq Composite Index, it is the most widely used index.

Who Was Dow Jones?
Dow Jones and the company is referred to as an American publishing and financial information firm. During 2007, after an extended takeover bid the company is said to have become a subsidiary of News Corporation. That the bid had been successful on August 1, 2007.

What is the Dow Jones Industrial Average?
You hear all the time about the Dow Jones Industrial Average, If you watch the news, such as the S&P 500 or The Russel 2000. These are designed to tell you, how companies traded on the stock market are doing in general which are known as "market averages".

The average value of 30 large, industrial stocks is simply known as the Dow Jones Industrial Average. Different kinds of companies that make up this index, such as, Goodyear, IBM and Exxon and General Motors. The  Dow Jones Industrial Average is nothing magical, which is the thing to understand. Someone has averaged the values of 30 caused companies, together by following a specific formula.

As there are all sorts of averages out there and the average value of 500 different large companies is the S&P 500. The average of 2,000 smaller companies tracks 2000 by the Russell.

What these averages talk about us as a whole the general health of stock prices. The prices of stocks as a group tend to rise, If the economy is "doing well". Prices as a group tend to fall, If it is "doing poorly,". These tendencies in the market as a whole are shown by the averages. While the market as a whole is going up If a specific stock is going down, that tells you something. The market as a whole, that tells you something as well if a stock is rising faster or slower than the market.

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