What Is the Meaning of Dow in the Stock Market? The Dow Jones Industrial Average, or the Dow for short, is one way of measuring the stock market's overall direction. It includes the prices of 30 of the most actively traded stocks. When the Dow goes up, it is considered bullish, and most stocks usually do well.

The DJIA was created to measure the movements of the leading companies in the United States engaged in industrial activities. It uses the price-weighted index, meaning that stocks with a higher share price carry a greater weight in the index than stocks with a low share price.

Key Takeaways. The Dow Jones is a price-weighted index, meaning its value is derived from the price per share for each stock divided by a common divisor. The Dow was created by Charles Dow to reflect a simple way of showing the average price of stocks in the marketplace.