A:

Dow Jones, or more precisely, Dow Jones & Company, is one of the largest business and financial news companies in the world. While the Dow Jones Industrial Average tracks publicly owned corporations, Dow Jones & Company is not a public company itself.

The firm was founded in 1896 by Charles Dow, Edward T. Jones and Charles Bergstresser. In 1889, they founded The Wall Street Journal, which remains one of the most influential financial publications.

Dow was known for his ability to ethically explain complicated financial news to the public. He believed that investors needed a simple benchmark to indicate whether the stock market was on the rise or the decline. Dow chose several industrial-based stocks for the first index, and the first reported average was 40.94.

Dow Jones Industrial Average

It is easy to confuse Dow Jones with the Dow Jones Industrial Average (DJIA). Often referred to as "the Dow", the DJIA is one of the most watched stock indexes in the world, containing companies like General Electric, Microsoft, Coca-Cola and Exxon. Dow Jones (the company) owns the Dow Jones Industrial Average, as well as many other indexes that represent different sectors of the economy, including the oldest index, the Dow Jones Transportation Average, which tracks 20 transportation companies, including airlines and delivery services. Another major index is the Dow Jones Utility Average, which tracks 15 U.S. utility stocks.

In the world of finance, you'll often hear people ask, "How did New York do today?" or "How did the market perform today?" In both cases, these people are likely referring to the DJIA as it is the most widely used index, above both the S&P 500 Index, which tracks 500 stocks, and the Nasdaq Composite Index, which includes more than 3,000 U.S. and international equities.

(To find out how the Dow is calculated, see: Calculating the Dow Jones Industrial Average.)

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