Does anyone know what dow/jones points mean in regards to the stock market?

When they report on the news that the Dow what either up/down by x- amount of points.

Wednesday, March 10th, 2010 Uncategorized

4 Comments to Does anyone know what dow/jones points mean in regards to the stock market?

  1. When they refer to the Dow Jones Industrial Average as up 200 points it means that the value of the index (in terms of price) has gone up 200, so for example if the DJIA is trading at 8000 and it went up 200 points, it is now trading at 8200. Essentially a point equates to a $1 change in the underlying price of the index.

    The Dow Jones Industrial Index is a common measure of stock market activity. It is an equal-weighted basket of 30 blue chip stocks and the value of the index is based the prices of the underlying stocks.

    2. financegal27 on March 10th, 2010

  2. Basically the Dow-Jones Industrial Average Is a fund. It is called an index because it measures the market quite accurately- it is composed of leading giants in the industries. So all it is is a collection of stocks. That said, when the Dow Jones falls, do not be afraid! Often it will fall even more due to mere speculation, sheep that sell because the markets going down (which goes against logic, don’t you want to sell high?) Take opportunities: when the market is low, buy!

    3. da dude person on March 10th, 2010

  3. The Dow Jones is an index made up of 30 stocks. These 30 stocks are comprised of compnaies in many industries to give a nice cross section of American companies. It is meant to be a barometer of how the market is as a whole is doing.

    4. David Z on March 10th, 2010

  4. The Dow Jones is an index or indicator of how the stock market is behaving. There are all sorts of indices but the Dow Jones works by calculating the average movement of 30 of the largest US companies. They are “weighted” by share price.
    As I say the DJ is only an indicator of the market. You may not think it is that representative of the whole of the market and may prefer to use, say the S&P (which uses 500 top US companies), or even one of the NASDAQ indices.
    Of course you can buy or sell the DJ Index but not directly. You can buy Dow Futures or Options and also ETFs.
    Another point is that the DJ index started in about 1896 and then consisted of 12 stocks. Also it is adjusted for stock splits etc. I don’t know at what level it started (so could have started at zero or 100 or any number) So you can see it hasn’t got a $ value nor does it relate to the values of the underlying stocks (only the movement). You could find that one index (say S&P) goes up whilst another, say, Dow Jones goes down!!

    5. raysor on March 10th, 2010

Dow Jones Index

The Dow Jones Industrial Average (NYSE: DJI, also called the DJIA, Dow 30, INDP, 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 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 modern components have little to do with traditional heavy industry. The average is price-weighted. 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—the sum of the component prices is divided by a divisor, which changes whenever one of the component stocks has a stock split or stock dividend, 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.
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