- quote -

The prices of the 30 Dow Industrials component stocks are added, and then
divided by a divisor whose purpose has been to remove the effect of splits,
stock dividends, changes in the component stocks, etc., over time.

The divisor is published every morning in the Wall Street Journal, though it
does not necessarily change every day. This morning it was 0.14090166,
meaning that a movement of $1 in a component's share price on April 22, 2004
would move the Industrials by seven points or so.

In microsoft.public.money, Joseph A. Zupko wrote:

- quote -

The sum of the prices of the 30 stocks are added up. Originally the
sum was divided by the number of stocks to get the average. To keep
the Dow the same whenever there is a split or change of membership,
the "divisor" is adjusted to give the same number before/after a
split or change of constituent stock.

http://www.investopedia.com/articles/02/082702.asp is one place that
talks to this.

the dow jones industrial average is thirty actively traded blue chip stocks.
the points are changes in the index not actual dollar changes in the value
of the stocks. the average is calculated by adding the closing prices of the
thirty stocks and dividing by a number adjusted for splits, spinoffs and
dividends.
hope that helps
bob

"Joseph A. Zupko" <unmonitored[at]sbcglobal.net> wrote in message
news:OhVJLiMKEHA.3292[at]TK2MSFTNGP11.phx.gbl...
- quote -

How is the DOW calculated?