Finance glossary
Dow Jones Industrial Average
Definition
A price-weighted index of 30 large U.S. companies.
The Dow tracks 30 prominent U.S. companies and is one of the oldest and most cited indices. Because it is price-weighted, higher-priced stocks sway it more, a quirk that makes it less representative than the broader, market-cap-weighted S&P 500.
In a sentence
Because the Dow Jones Industrial Average is price-weighted, its priciest stock swayed the index the most.
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