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• A stock market average is a mathematical way of reporting the composite change in prices of the stocks that the average includes.

  Each average is designed to reflect the general movement of the broad market or a certain segment of the market and often serves as a benchmark for the performance of individual stocks in its sphere.

  A true average adds the prices of the stocks it covers and divides that amount by the number of stocks.

  However, many averages are weighted, which usually means they count stocks with the largest market capitalizations more heavily than they do others. Weighting reflects the impact that the stocks of the biggest companies have on the markets and on the economy in general.

  The Dow Jones Industrial Average (DJIA), which tracks the performance of 30 large-company stocks, is the most widely followed average in the United States.

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  Cite Definition for Average

  American Psychological Association (APA)

  Average. (n.d.). Yahoo Personal Finance Glossary. Retrieved March 30, 2023, from website: http://www.expertglossary.com/definition/average.

  Chicago Manual of Style (CMS)

  Average. finance.yahoo.com. Yahoo Personal Finance Glossary. Yahoo Finance. http://www.expertglossary.com/definition/average (accessed: March 30, 2023).

  Modern Language Association (MLA)

  "Average." Yahoo Personal Finance Glossary. Yahoo Finance. 30 March. 2023 http://www.expertglossary.com/definition/average.

• Browse Related Terms: Average, Breakout, Dogs of the Dow, Dow Jones 65 Composite Average, Dow Jones Industrial Average (DJIA), Dow Jones Transportation Average, Dow Jones Utility Average, Dow theory, Efficient market theory, Logarithmic scale, NASDAQ Composite Index, New York Stock Exchange Composite Index, Qubes, Value Line Composite Index, volume, Weighted stock index

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