The Dow Jones Industrial Average is an index of companies representative of the industrial sector of the U.S. stock market, such as 3M, Johnson & Johnson, and McDonald's. Other examples of companies included in the DJIA are American Express, Exxon Mobil and Goldman Sachs.
The industrial sector that the selected stocks represent includes a broad range of sectors, excluding transportation and utilities. The DJIA includes 30 publicly traded stocks. Approximately two-thirds of the companies included in the average are manufacturers, either of industrial or consumer goods. Apple and Coca-Cola are examples of manufacturers of consumer goods included in the index. GE and Boeing are examples of manufacturers of industrial goods. The remaining one-third of the stocks included in the index represent a range of sectors, from the financial sector to the entertainment sector. Disney is included in the index as a representative of the entertainment sector. Cisco represents the information technology sector.
Different companies may be added or removed from the DJIA over time. The index aims to include widely held and frequently traded stocks, so that it represents very recent market transactions. If the index included stocks that were traded only infrequently, the most recent stock trade information might become too old to be a true representation of the current state of the stock market.