Stock Price Charts

What does a single point in a stock-market index mean (e.g. Dow Jones)?

What does it mean when you hear that a stock-market index, such as the Dow Jones for example, rises or falls? What does a single point on such an index represent?

Public Comments

1. A point drop basically mean the stocks of the company the dow jones consist of, overall together has lost $1 value all together. Dow jones is basically like a mutal fund that contains 30 of the largest and most widely held public companies in the United States. A point drop mean that combined these 30 stock lost $1. A point drop on the market is equal to a $1 drop in price of what whatever your talking about, stock, mutual funds, bonds, indexes, whatever.
2. The Dow Jones is equal to the sum of the values of the shares divided by some factor. This factor changes whenever companies merge or split (or join or leave the index), such that such actions do not cause a change in the index value. I don't know about other indices though.