Stock Market Index

A 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. The most commonly quoted market index is the Dow Jones Industrial Average (DJIA).

History of Stock Market Index

The first stock market index was created by Charles Dow in 1884. It was called the Dow Jones Industrial Average (DJIA). The DJIA was created to measure the performance of the industrial sector of the U.S. economy. It was composed of 12 stocks at the time. Over the years, the DJIA has grown to include 30 stocks. The DJIA is still the most widely quoted stock market index in the world.

In the 1950s, the Standard & Poor’s 500 (S&P 500) was created. This index was created to measure the performance of the 500 largest companies in the U.S. The S&P 500 is still the most widely used stock market index in the U.S. It is used as a benchmark for the performance of the U.S. stock market.

In the 1970s, the Nasdaq Composite was created. This index was created to measure the performance of the technology sector of the U.S. economy. It is composed of over 3,000 stocks. The Nasdaq Composite is the most widely used stock market index in the technology sector.

Comparison Table

Summary

Stock market indices are used to measure the performance of a section of the stock market. The most commonly quoted indices are the Dow Jones Industrial Average (DJIA), the Standard & Poor’s 500 (S&P 500), and the Nasdaq Composite. For more information about stock market indices, you can visit websites such as Investopedia, Yahoo Finance, and Bloomberg.

See Also

• Stock Exchange
• Stock Price
• Market Capitalization
• Index Fund
• Mutual Fund
• Exchange Traded Fund (ETF)
• Portfolio
• Diversification
• Risk Management
• Volatility

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