From Yahoo Answers The DOW is an index, which is a group of individual stocks, put into a group by the industry, and these stock make up the Index. The stocks in the index will have common characteristics. DOW is made up of large companies that are well established and most pay a dividend. It is a very old index. The NYSE is the New York Stock Exchange. It is the old school exchange, very popular and a big name. Trades are done on paper, by people. NASDAQ is the new school exchange, many tech companies trade here, and all trades are done electronically. I am not sure how much you know about finance, but the exchanges are where stocks are traded, the market where we buy and sell, and price of stocks are determined by supply and demand. From Investopedi.com Because of the way people throw around the words “Dow” and “Nasdaq,” both terms have become synonymous with “the market,” giving people a hazy idea of what each term actually means. In this question, “the Dow” refers to the famous figure that peppers almost all business news reports: the Dow Jones Industrial Average (DJIA), an important index that many people watch to get an indication of how well the overall stock market is performing. The Dow, or the DJIA, is not exactly the same as Dow Jones and Company, the firm that publishes the Wall Street Journal. However,the editors of the Wall Street Journal are the people who maintain the DJIA, along with other Dow Jones indices. The Nasdaq is also a term that can refer to two different things: first, it is the National Association of Securities Dealers Automated Quotations System, which is the first electronic exchange, where investors can buy and sell stock. Second, when you hear people say that the “the Nasdaq is up today,” they are referring to the Nasdaq Composite Index, which, like the DJIA, is a statistical measure of a portion of the market. Both the Dow and the Nasdaq, then, refer to an index, or an average of a bunch of numbers derived from the price movements of certain stocks. The DJIA tracks the performance of 30 different companies that are considered major players in their industries. The Nasdaq Composite, on the other hand, tracks approximately 4,000 stocks, all of which are traded on the Nasdaq exchange. The DJIA is composed mainly of companies found on the NYSE, with only a couple of Nasdaq-listed stocks. Remember, although both “the Dow” and the “Nasdaq” refer to market indices, only the Nasdaq also refers to an exchange where investors can buy and sell stock. Furthermore, an investor can’t trade the Dow or the Nasdaq indexes because they each represent merely a mathematical average that people use to try and make sense of the stock market. You can, however, purchase index funds, which are a kind of mutual fund, or exchange traded funds, which are securities that track the indexes. From WikiAnswers.com NASDAQ and the Dow Jones Industrial Average are separate “indexes” of stocks. They track the changes in the value of the stock of different companies. Each index includes different stocks. NASDAQ includes a lot of different companies, many of which are technology companies. The Dow includes just a few dozen companies.