Learning About the U.S. Stock Market Through English Phrases
If you follow U.S. market news, you often hear about the Dow Jones Industrial Average, commonly known as the Dow.
But what exactly is it, and why does it still matter today?
In this article, we’ll explain the basics of the Dow while learning useful English phrases commonly used in financial news.
What Is the Dow Jones Industrial Average?
The Dow Jones Industrial Average (DJIA) is a stock market index that tracks 30 major U.S. companies.
It was first created in 1896 by Charles Dow and is one of the oldest stock indices in the world.
Key Characteristics
- Composed of 30 large, well-established companies
- Represents major sectors of the U.S. economy
- Frequently quoted in global financial news
Companies in the Dow
The Dow includes some of the most influential companies in the United States, such as:
- Apple
- Microsoft
- Amazon
- Coca-Cola
- McDonald’s
- Goldman Sachs
These companies are often seen as symbols of the U.S. economy.
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When the Dow Goes Up or Down
The Dow rose 300 points today.
The Dow fell sharply amid recession fears.
Useful Vocabulary
- rose / climbed: went up
- fell / dropped: went down
- amid ~: in the middle of / because of
The Dow Is a Price-Weighted Index
One unique feature of the Dow is that it is a price-weighted index.
This means that companies with higher stock prices have a greater impact on the index.
The Dow is a price-weighted index.
As a result, a sharp move in a high-priced stock can significantly affect the Dow.
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Expressing Market Sentiment
The Dow reflects investor sentiment.
The Dow is seen as a barometer of the U.S. economy.
Key Expressions
- investor sentiment: how investors feel about the market
- barometer: an indicator
- is seen as ~: is regarded as
Difference Between the Dow and the S&P 500
| Index | 특징 |
|---|---|
| Dow | 30 companies, price-weighted |
| S&P 500 | 500 companies, market-cap weighted |
The S&P 500 is more broadly diversified than the Dow.
Many investors believe the S&P 500 better reflects the overall market, but the Dow still plays an important symbolic role.
Why Does the Dow Still Matter?
The Dow remains important for several reasons:
- Long history and strong brand recognition
- Easy for the public to understand
- Useful for capturing overall market mood
The Dow still matters because it captures market psychology.
Conclusion
- The Dow represents 30 major U.S. companies
- It appears frequently in English financial news
- It’s a great tool for learning both economics and English
By paying attention to how the Dow is described in English news, you can improve both your market knowledge and English skills at the same time.
