The Dow Jones Industrial Average tracks 30 major US companies. Unlike market-cap-weighted indices, it is price-weighted, so a higher-priced stock can have greater influence. It offers a distinct view of established US businesses.
History and development
Charles Dow introduced the Dow Jones Industrial Average on May 26, 1896, as an average of 12 industrial companies. Its roster later expanded to 30.
Despite the word 'Industrial,' membership is not confined to manufacturers. Successive replacements have incorporated services and technology as the American economy has changed.
References: S&P: Dow history
Comparing charts on this board
The Dow is a US stock-market gauge, but it does not give companies weight simply in proportion to their market capitalization. Its price weighting can give similarly sized businesses different influence. When it moves opposite the S&P 500 or Nasdaq-100, begin with differences in membership and weighting instead of assigning a single strong-or-weak label to all US stocks.
Compare the three indices' percentage changes, then inspect individual companies where the gap stands out. A report of a several-hundred-point Dow move cannot be compared directly with another index's point change. Its 30-company universe also does not describe Japanese stocks or the whole US small-cap market.
Related charts: S&P 500 · NASDAQ 100 · Russell 2000
Official references: Dow Jones Industrial Average