Investing and Financial Markets
Stock Market
Dow Jones Industrial Average

Why does the Dow Jones fall?

Answer

Wiki User
10/14/2008

Investors lose confidence in it. It's like this: simply put, if you think the market, and your stocks in particular, are about to lose value, you sell them to avoid losing money. if enough people do this, then supply/demand theory takes over and you have more of one stock being sold than people wanting to buy it. therefore, the price of the stock goes down. Since the Dow Jones is an index of a bunch of major industrial stocks, if enough of these stocks see a fall in price, the overall value of the stocks being traded goes down, therefore you see a drop in the Dow Jones.