Dow Jones Industrial Average

The Dow Jones Industrial Average (DJIA), Dow Jones, or simply the Dow (/ˈd/), is a price-weighted measurement stock market index of 30 prominent companies listed on stock exchanges in the United States.

Dow Jones Industrial Average
Historical logarithmic graph of the DJIA from 1896 to 2011
FoundationFebruary 16, 1885; 136 years ago (1885-02-16) (as DJA)[1]
May 26, 1896 (1896-05-26) (as DJIA)[2]
OperatorS&P Dow Jones Indices
Exchanges
Trading symbol
  • ^DJI
  • $INDU
  • .DJI
  • DJIA
Constituents30
TypeLarge cap
Market capUS$10.84 trillion
(as of July 30, 2021)[3]
Weighting methodPrice-weighted index
Websiteus.spindices.com/indices/equity/dow-jones-industrial-average

Although the DJIA is one of the oldest and the most commonly followed equity indices, many professionals consider the Dow to be an inadequate representation of the overall U.S. stock market compared to broader market indices such as the S&P 500 Index or Russell 3000. The DJIA includes only 30 large companies due to the lower number of American stocks during the index's creation in the late 1800s, and due to the era's data limitations the DJIA is weighted by stock price, unlike later stock indices which use company value. Furthermore, the DJIA does not use a weighted arithmetic mean.[4][5][6][7]

The value of the index is the sum of the stock prices of the companies included in the index, divided by a factor which is currently (as of September 2020) approximately 0.152. The factor is changed whenever a constituent company undergoes a stock split so that the value of the index is unaffected by the stock split.

First calculated on May 26, 1896,[2] the index is the second-oldest among the U.S. market indices (after the Dow Jones Transportation Average). It was created by Charles Dow, the editor of The Wall Street Journal and the co-founder of Dow Jones & Company, and named after him and his business associate, statistician Edward Jones. The word industrial in the name of the index initially emphasized the heavy industry sector, but over time stocks from many other types of companies have been added to the DJIA.

The index is maintained by S&P Dow Jones Indices, an entity majority-owned by S&P Global. Its components are selected by a committee. The ten components with the largest dividend yields are commonly referred to as the Dogs of the Dow. As with all stock prices, the prices of the constituent stocks and consequently the value of the index itself are affected by the performance of the respective companies as well as macroeconomic factors.