Dow Jones Industrial Average And Nasdaq

1450 Words Mar 1st, 2016 6 Pages
The Dow Jones Industrial Average and NASDAQ are both significant economic indicators. The Dow Jones was created by Charles Dow in 1896. “The Dow” is a price-weighted average of 30 significant stocks, most of which are traded on the New York Stock exchange. The NASDAQ is the National Association of Securities Dealers Automatic Quotation System. It is the first and largest electronic stock exchange in the world, consisting of more than 4000 stocks. Both the Dow Jones Industrial Average and NASDAQ are significant gauges of the current state of the economy. However, the NASDAQ is much larger and includes more than 4000 companies, while the Dow Jones only includes 30 companies. All of the NASDAQ stocks are also traded on the NASDAQ exchange, while the majority of Dow stocks are traded on the NYSE. The 30 companies included in the Dow Jones are large companies, and not always representative of the current state of other companies, while the NASDAQ includes a broader range of companies. Both indexes are simply mathematical values that are used to understand the stock market. The Dow Jones and the NASDAQ are considered “market indexes” because they provide a summary of the current state of the overall market.

Significance The Dow Jones and NASDAQ are both mentioned frequently, and they each hold their own significance. The main significance of the Dow is that it is a good indicator of general stock market trends. The Dow can demonstrate the current state of the stock market and…
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