The stock market’s every move is reported in a number of different daily indexes and averages. The indexes and averages track highs and lows, the change from yesterday, last month or last year, plus the volume of trading and dozens of other details.
The New York Stock Exchange Composite Index includes all stocks traded on the New York Stock Exchange (NYSE). The NYSE also reports the activity in four sectors — industrial, utility, transportation and financial — in separate indexes. There are approximately 2,000 stocks that are included in the index. Of those over 1,600 are from the U.S. and over 350 are companies that non-U.S. based.
The Standard & Poor’s 500 Index also known as the S&P 500 incorporates a broad base of 500 stocks, including 400 industrial companies, 20 transportation companies, 40 utilities and 40 financial companies. It’s widely considered the benchmark for large-stock investors. Because some of its stocks have a greater influence on the direction of the market than others, the S&P 500 is calculated by giving greater weight to some stocks.
The Nasdaq Composite Index tracks the performance of stocks traded on the Nasdaq Stock Market. The Nasdaq Index usually shows more volatility than the other indexes because of the kinds of companies it covers. There are some 3000 companies listed in the index with many companies in high tech and internet sectors.
NYSE MKT Composite Index, which used to be called the AMEX Market Value Index, monitors the performance of over 800 companies listed on the NYSE Amex equities market. NYSE Euronext purchased the American Stock Exchange (AMEX) in 2008. The AMEX name was then changed to NYSE Alternext U.S., and later in 2009 was again changed to NYSE Amex. The companies listed in this index are small capitalized stocks.
The Value Line Composite Index includes nearly 1,675 stocks. It is essentially composed of the same corporations that are covered in The Value Line Investment Survey.
The Russell 2000 represents the smallest two-thirds of the 3,000 largest U.S. companies, including a great many of the initial public offerings of the last few years. It is widely followed by mutual funds specializing is small capitalized companies.
The Wilshire 5000, the broadest index, includes all stocks traded Over-the-Counter and on other exchanges, including the companies listed in the S&P 500.
Quote of the week: “It were not best that we should all think alike; it is difference of opinion that makes horse races.” — Mark Twain
Bart Ward is the chief executive officer of Ward & Co. Ltd. an Anoka-based registered investment adviser – specializing in the management of stock and bond portfolios in companies which are listed on the NYSE.