how does the dow differ from the s p 500 
the s p 500 and djia are the two most watched stock indexes in the u s however these two benchmarks are very different the bottom linethe dow jones industrial average is a stock index of 30 u s blue chip large cap companies which has become synonymous with the american stock market as a whole the index however only has 30 companies and the index itself is price weighted meaning that it does not always present an accurate reflection of the broader stock market companies in the djia are also chosen by a committee and are balanced to try to represent the state of the overall economy this means that certain companies may be added to or deleted from the index periodically without much in the way of being able to predict when or which stock will be changed despite its limitations however the dow still holds a special place in american finance 