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What is the difference between the Dow Jones and the NASDAQ?
The Dow Jones Industrial Average is an indicator of stock market prices and is based on the share values of 30 leading companies listed on the New York Stock Exchange. The NASDAQ, or National Association of Securities Dealers Automated Quotation System, is a computerized system that facilitates trading by providing broker/dealers with current bid and ask price quotes on over-the-counter stocks and some listed stocks. Neither is synonymous with stock market. The Dow is the index that interested parties may watch to find out how well the overall stock market is performing. NASDAQ can mean two different things: 1) the electronic exchange where investors can buy and sell stock, and 2) the composite index which is a statistical measure of a part of the stock market. Although both the Dow and the NASDAQ refer to market indices, only the NASDAQ refers also to an exchange where investors can buy and sell stock.