Know Everything about the USA Stock Market Index
Are you searching to know about the USA stock market index in detail? Don’t have any knowledge regarding the stock market? Then this blog is going to be perfect for you; in this blog our Assignment Help Experts will guide you regarding the USA stock market index in detail. So, read the blog and make your concept clear regarding it.
Most of the time we hear in the news that the stock market index is up or down. But I am sure there are a lot of people who don’t have enough knowledge regarding this, as a result, they fail to understand the basic principle of the stock market or how it works and what is its importance etc.
Before going to any conclusion the first thing we need to know is what the stock market index actually is. A stock market index is a particular way to measure and report the ups and downs of a pool of securities in a market. These securities are measured based on various criteria like size of the company, its location, its liquidity etc. based on these criteria stock market index is developed.
Every company regularly checks their development of index by tracking the performance of its various organizations and aggregates all the data to form a single figure so that an index may be represented through it. In the world there are various companies and every company’s assets are measured in at least one stock market. Here an individual can’t invest directly into a stock market.
In USA there are mainly three stock market index i.e. S&P 500, Dow Jones Industrial Average and Nasdaq Composite, all these are followed by investors and electronic media. Besides these there are more than 5000 other companies that make up the U.S. equity market.
- The S&P 500 broadly known as the Standard & Poor’s 500 index shows the index of the 500 top companies of the USA. Investors buy the share based on the liquidity, sector classification, financial stability etc. of the company. The S&P 500 Index itself represents approx. 80% value of the whole USA stock market. As a result, if the total market value of all these 500 companies under S&P falls by 5% then the total value of the index also falls by 5%.
- The Dow Jones Industrial Average is considered to be one of the oldest and renowned stock markets in the world. It consists of a stock of 30 largest influential companies in the USA. It is basically a price weighted index. It mainly sums up the per share price of all these companies and then divides the sum by the number of companies. Seeing the calculation process you might think this process of calculation is very simple, but actually it is not. For the years investors have experienced the stock splits, spin offs and many such events which has made the whole process complicated.
- The Nasdaq Composite Index is known for being a technology stock trader. This stock market index includes such companies that are based on outside the USA. The Nasdaq Composite Index is renowned for being tech weighted; it includes various sub-sectors that are based on software, semiconductors, biotech and many more. A large portion of its stocks come from technology. Investors prefer to have securities from different sources too i.e. financial, insurance etc. for them the Nasdaq Composite Index is the first preference. It has a lot of large and small companies and it regularly shows the index of these firms.
I hope this blog will help you to know about the stock market index in brief. If you want to know more or have doubts, you can easily clarify your doubts by asking questions to our programming assignment help experts who are always available for you. To connect with our skilled experts you need to log in to our official website and see the details of availing them.