DEFINITION of 'Market Average'

A measure of the overall price level of a given market, as defined by a specified group of stocks or other securities. A market average equals the sum of all current values of stocks in the group divided by the total number of shares in the group.

BREAKING DOWN 'Market Average'

A market average measurement is a simple way to evaluate the price level of a group of stocks. For example, the Dow Jones Industrial Average, which is a price-weighted average, covers 30 blue chip stocks listed on the NYSE and is widely used to track overall U.S. stock market performance.

RELATED TERMS
  1. Price-Weighted Index

    A stock index in which each stock influences the index in proportion ...
  2. Industry Group

    A classification method for individual stocks or companies, usually ...
  3. Value Change

    An adjustment made to a stock's price to reflect the number of ...
  4. Average Price

    1. A representative measure of a range of prices that is calculated ...
  5. Blue Chip Indicator

    A formal gauge or measure of the performance of a selected group ...
  6. Rule Of 18

    A rule whereby the sum of the inflation rate and the P/E ratio ...
Related Articles
  1. Insights

    What's a Price-Weighted Index?

    A price-weighted index is a stock index in which the proportion of each member’s price-per-share determines its influence.
  2. Investing

    These 3 Dow Stocks Are Up 20% YTD (UNH,VZ,WMT)

    These three blue chips in the Dow Jones Industrial Average have appreciated 20% year to date.
  3. Personal Finance

    Why You Should Understand The Stock Market

    Even if you don't invest a cent in stocks, you should still understand how the stock market works. Find out why.
  4. Trading

    Use Moving Averages to Buy Stocks

    A moving average constantly updates a stock's average price, but it cannot predict a stock's performance.
  5. Financial Advisor

    How Financial Advisors Can Learn from Their Peers

    Advisor study groups can be a big help in building a top practice. Here's a guide to creating one.
  6. Investing

    Explaining Market Value of Equity

    Market value of equity is the total value of all the outstanding stock as measured in the stock market at a particular time.
  7. Investing

    How Now, Dow? What Moves The DJIA?

    Find out how this index tracks market movements and where it falls short.
  8. Small Business

    How Market Segments Work

    A market segment is a group of people who share similar qualities.
  9. Trading

    Simple Moving Averages Make Trends Stand Out

    The moving average is easy to calculate and, once plotted on a chart, is a powerful visual trend-spotting tool.
  10. Financial Advisor

    Capital Group: Investment Manager Highlight

    Discover Capital Group, one of the largest but least-known global asset managers. Learn about Capital Group's 85-year history of steady returns to investors.
RELATED FAQS
  1. Why is the Dow Jones Industrial Average (DJIA) price weighted?

    Learn how the Dow Jones Industrial Average has told the story of the broad market through its simple, price-weighted calculation ... Read Answer >>
  2. What is the difference between the Dow Jones Industrial Average and the S&P 500

    Learn about the Dow Jones Industrial Average and the S&P 500, including interesting facts about these indexes, and discover ... Read Answer >>
  3. What does the Dow Jones Industrial Average measure?

    Learn about what the Dow Jones Industrial Average measures and discover the meaning of changes in this important and widely ... Read Answer >>
  4. What's the difference between the Dow Jones Industrial Average and the S&P 500?

    The major difference between these two indexes is that the Dow Jones Industrial Average (DJIA) includes a price-weighted ... Read Answer >>
  5. When can you trade the stocks in the Dow Jones Industrial Average (DJIA)?

    Find out when you can trade shares linked to the Dow Jones Industrial Average during NYSE and Nasdaq trading sessions. Read Answer >>
Hot Definitions
  1. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  2. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  3. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  4. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  5. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  6. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
Trading Center