Dow Vs Nasdaq

“Dow” and “NASDAQ” have become synonymous in the market world and because of this the actual meaning of the terms seem to be less known. To clear this misunderstanding of the meaning between the two, I want to clarify upon their meanings so that the data found can be understood upon examination. The first reference will be of Dow, or better known as the Dow Jones Industrial Average (DJIA), which refers to the famous figure that peppers almost all business news reports. The importance of Dow is the index that is maintained through the Wall Street Journal by providing how well the overall stock market is performing. Onto the NASDAQ, this term refers to two different things: first, the National Association of Securities Dealers Automated Quotations System, which is known to be the first electronic exchange, where stock is sold and bought through investors. The second, is the NASDAQ Composite Index, which is the statistical measure of a portion of the market, same as the DJIA. It is this similarity that typically causes the misunderstanding in the two being synonymous.

However, the two track two different things. The DJIA only tracks the performance of 30 different companies found on the New York Stock Exchange (NYSE) that are considered to hold major roles in their industry. While the NASDAQ tracks approximately 4,000 stocks that are traded on the NASDAQ exchange. The DJIA and the NASDAQ are merely a mathematical average in order to obtain and make sense of the stock market, which is what will be demonstrated in the daily rates from the dates of January 4, 2016 through January 15,