View Full Version : What's the Dow Ind Avg?
penner01
March 5th, 2009, 9:30 pm
I understand the mechanics of the market ok, but I have to confess I really don't know what the Dow number is. Where do we derive that? And do all the markets daily numbers reflect the same formula?
Studebaker_Hawk
March 5th, 2009, 10:13 pm
I understand the mechanics of the market ok, but I have to confess I really don't know what the Dow number is. Where do we derive that? And do all the markets daily numbers reflect the same formula?
The DOW number is made up of 30 large corporations stock values.
penner01
March 6th, 2009, 12:15 pm
The DOW number is made up of 30 large corporations stock values.
Yes, but my question is really how that number is derived. How does the stock value of 30 select corporations translate into a number in the thousands? I'm just trying to understand what the number means.
Blarb
March 6th, 2009, 3:41 pm
I understand the mechanics of the market ok, but I have to confess I really don't know what the Dow number is. Where do we derive that? And do all the markets daily numbers reflect the same formula?
The short answer is that it is the top 30 companies in size by revenue and the size of its pool of stock holders. The actual number listed is based on a formula that divides the sum of all 30 companies stock price by a "divisor". Don't ask me the exact components of the formula because I don't know but it takes into account things like stock splits, violatility, changes in the make up of the listed companies, etc. It's actully a published number and you can research how Dow Jones (the parent company that publishes the Industrial Average) came up witht he current number by looking up the "DJIA divisor".
penner01
March 6th, 2009, 5:56 pm
The short answer is that it is the top 30 companies in size by revenue and the size of its pool of stock holders. The actual number listed is based on a formula that divides the sum of all 30 companies stock price by a "divisor". Don't ask me the exact components of the formula because I don't know but it takes into account things like stock splits, violatility, changes in the make up of the listed companies, etc. It's actully a published number and you can research how Dow Jones (the parent company that publishes the Industrial Average) came up witht he current number by looking up the "DJIA divisor".
Ah, there we go. Thanks, Blarb....I'll go have a look.