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This answers that question – and clears up a few common misconceptions about these indices.
You see, the Dow Jones Industrial Average is the most widely quoted measure of stock performance. It's the second-oldest U.S. market index, arriving 12 years after the Dow Jones Transportation Average, in 1896. (Both were created by The Wall Street Journal founder, Charles Dow.)
But the Dow is not the best gauge of the broad market, as is widely thought.
In fact, there are three big reasons why the Standard & Poor's 500 Index beats out the Dow in the battle for best market indicator.
Take a look.