What is the Dow Jones index?

Generally speaking, the Dow Jones index is an arithmetic average stock index compiled by Charles Henry Dow, founder of Dow Jones company in 1884. It is the oldest stock index in the world. The term "Dow Jones Industrial Average" refers to one of the four short-term indices. This index has the strongest representativeness and the widest range. It is also the most influential and authoritative stock price index in the world. It is necessary for investors who operate US stocks. It is the same as domestic investors who look at the Shanghai Composite Index every day. Even in 2018, because of the emergence of the Sino US trade war, domestic investors also pay attention to the changes of the Dow Jones index on the domestic stock market.

At present, the Dow Jones industrial average is maintained by the editorial department of the Wall Street Journal, and the standard of its constituent stocks is the stock that the company continues to develop, has the largest scale and is representative in the industry, and is favored by investors. At present, its 30 component stocks have become the representative of blue chip stocks in the United States. The subtle changes of this index will cause emotional fluctuations of hundreds of millions of people. It is no longer an ordinary index index, but the code of financial culture all over the world. Since 1928, the 30 industrial and commercial companies used to calculate the Dow Jones industrial average have been replaced 30 times. Almost every two years, a new company replaces the old one. Moreover, this index has attracted attention, and it has never been interrupted since its compilation. It has made data response to the economic development and stock market in different periods.
In addition to the Dow Jones index, the U.S. stock market, like China's stock market, has two other important indexes: the standard & Poor's 500 index and the NASDAQ index. The standard & Poor's 500 index was compiled in 1957. In 1976, the constituent stocks were composed of 400 industrial indexes, 20 transportation stocks, 40 utility stocks and 40 financial stocks. Therefore, this index can better reflect the changes of the market. Nasdaq was founded on February 8, 1971, mainly to regulate the OTC trading and small enterprises to provide financing platform, which has become the second largest securities trading market in the world. The NASDAQ index is an average stock price index for changes in the market. The basic index is 100. The main high-tech industries listed in this market include software, computer, telecommunications, biotechnology, retail and wholesale trade.