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Dow Jones Industrial Average

An index of 30 large US companies, weighted by share price rather than size.

Market BasicsBeginner

Definition

The Dow tracks 30 prominent US companies. Because it is price-weighted, a stock with a higher share price moves the index more than one with a lower price, regardless of company size. That is unlike the S&P 500, which weights by market cap.

Watch out for

With only 30 stocks and price weighting, the Dow is a narrow picture of the market compared with broader indexes.

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