Final answer:
The stock market is where shares of publicly-held companies are traded. The Dow Jones Industrial Average (DJIA) is a price-weighted average of 30 industrial stocks on significant U.S. exchanges. Major stock markets include the NYSE and NASDAQ, with additional OTC markets for unlisted stocks.
Step-by-step explanation:
The stock market is a system where individuals and entities can buy, sell, and trade shares of publicly-held companies. It represents the aggregation of buyers and sellers of stocks, which are shares of ownership in a company. If someone wants to understand how the market is performing overall, they often look at certain indexes or averages.
One of the most widely recognized market averages is the Dow Jones Industrial Average (DJIA). The DJIA is a price-weighted average that tracks 30 large and influential industrial companies listed on the New York Stock Exchange and the NASDAQ. This index is frequently used as an indicator for the general health of the industry and the economy. It's important to pay attention to the DJIA because it reflects significant changes in the market and the economy.
Major stock markets include the New York Stock Exchange (NYSE) and the NASDAQ. Additionally, there are smaller regional stock exchanges across the U.S as well as global exchanges like the London Stock Exchange (LSE) and the Tokyo Stock Exchange (TSE). The over-the-counter (OTC) market allows for the trading of stocks that are not listed on these formal exchanges, with examples like the OTC Bulletin Board (OTCBB) or Pink Sheets. Understanding the differences between these markets can help investors make better decisions.