What does the (NYSE) number mean, and how is it derived? In other words, when they say "the market is down 777 points today," what do the "points" represent?

Personal Finance December 08, 2013 Print Friendly and PDF

Think of the NYSE (New York Stock Exchange) as a marketplace where stocks are traded. The Dow Jones Industrial Average (sometimes referred to as the Dow or DJIA) is one of many stock market indexes that are used to track the performance of the stock market.

Within the thousands of stocks that are actively traded and tracked, the Dow tracks 30 specific large U.S. company stocks on a daily basis. It was originally established in 1896 and has been providing a barometer of market performance ever since.

The unit of change in the collective price of the 30 specific stocks within the Dow is measured in points, and this is often what is reported by the media. When points are reported, it is important to note whether the change is positive (the value of the collective 30 stocks rose) or negative (the value of the collective 30 stocks fell).

Also, note the amount of the change. For example, 500 points is twice as much change as 250 points.

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