::Stock market index


Index::index    First::indices    Stock::market    Journal::title    Stocks::stock    Which::funds

A comparison of three major U.S. stock indices: the NASDAQ Composite, Dow Jones Industrial Average, and S&P 500. All three have the same height at March 2007. Notice the large dot-com spike on the NASDAQ, a result of the large number of technology companies on that index.

A stock index or stock market index is a measurement of the value of a section of the stock market. It is computed from the prices of selected stocks (typically a weighted average). It is a tool used by investors and financial managers to describe the market, and to compare the return on specific investments.

An index is a mathematical construct, so it may not be invested in directly. But many mutual funds and exchange-traded funds attempt to "track" an index (see index fund), and those funds that do not may be judged against those that do.

Stock market index sections
Intro   Types of indices   Index versions   Weighting   Criticism of capitalization-weighting   Indices and passive investment management    Ethical stock market indices   Innovations Awards to Stock Indices   Lists   See also   Notes  References  External links  

PREVIOUS: IntroNEXT: Types of indices