Dow Jones Industrial Average, the DOW, closed today at 28,256.03

[tinrobot]

4. The number is actually not an 'average', it is a sum

They add up all the values of the stocks to get the price of the index. On top of that, they have to correct for things such as stock splits, so the stocks are multiplied by a number that correlates to those shifts in price. They also have to account for companies that fall out of the index and are replaced by new ones. Some companies have been in the index for 80+ years, some less than a decade.

Needless to say, it gets complex. Overall, it is not a good index to judge the overall health of the economy. I think the reason it is used is simply because it is the oldest index still in use, so it roughly represents a historical record going back to the late 1890's.