Dow Jones is the most popular index for markets in the United States, and serves as the basis for the New York Stock Exchange. Dow Jones Averages include a diverse group of popular stock market averages. These function to help investors understand where the market is going and inform them of rising trends. Therefore, information gathered from these indices influence investor behaviour.
There are various categories for the Dow Jones Averages. The most well-known of these is the Dow Jones Industrial Average, which is oftentimes referred to as the DOW. This average is made of 30 large industrial corporations and is also the most popularly quoted. These are regarded as some of the most stable stocks, and rankings are based on several factors, such as dividends and stock splits. The DOW is quoted in points instead of dollars.
Another type of average is the Dow Jones Transportation Average. Although the Dow Jones Industrial Average is the most well-known, it is the Transportation Average which is the oldest. When it first came about, which was in the year 1896, it was mostly composed of railroad companies, which were then the most popular transporters. Progress has entailed the addition of other modes of transport, increasing the number of airlines included in this average.
The Dow Jones Utility Average, on the other hand, is comprised of corporations that provide, as the name suggests, utilities. The newest among the averages, it has not changed as much as the DJIA, at least in terms of composition. With the deregulation of most public utilities, however, competition has been heightened and mergers are taking place more than ever.