Various USA Stock Market Indices?

Question

What are the various USA stock market indices?

What is the difference between Nasdaq, Dow Jones, NYSE, Russell etc ?

Answer 1

The Standard & Poor's 500 index used by professionals to grade the market performance for a day, week, month.  The Dow Jones is the industrial index which is kind of a msinomer because it includes McDonads and MSFT.   When I was younger Bethleham Steel was on of the 30 Dow Industrial stocks. It is now bankrupt!  The only Dow 30 that was an original member still on the list is General Electric.  There is a Russell 2000, and 3000.  I think one is mid cap and the other small cap indes.  Nasdaq is an index of 100 stocks which is usually dominated by technology stocks.  You can buy a Barrons Financial Dictionary for your desk reference.  I have one; but, it is in town!   I can give a more detailed response if there are holes in this rapid reply.  Good luck.

Answer 2

They differ in two ways:  the stocks they include in the index calculation, and the way to calculate the index.

Dow Jones calculates around 30 (or 60, I forgot by now)inmense corporations.  Those publishing the index find out how many stocks are out there for each company and the price for the day.  Then they calculate how much is the value of the total stock out there.  

The Russell is an index for much smaller companies, and includes 2,000 of them.  

The final index calculation may or may not use weights, or something in that line.  In this fashion, one index might decide to weight the value by company, but the other by the number of outstanding shares.  Here I can't recall too well.  

Dow Jones tends to meassure mega super corporations.  They are so big that they have a huge impact in the economy.  but they are not the economy.

S&P  meassures many more companies, and often includes those in the dow jones and Nasdaq.

Nasadaq,  ...  , more technological and risky index

NYSE is an index of the corporations listed on that market, not so widely used.

Russell, small companies (still, many millions biG!)

Answer 3

The S&P 500 tracks 500 large-cap companies (~98% domestic) selected by an oversight board which screens for companies that it believes will be able to sustain and grow their market cap over time.  The 500 is cap-weighted, which means that larger companies have a bigger impact on the index.

The Dow Jones Industrial Average tracks 30 blue-chip stocks representing some of the largest and most recognizable companies in the country.  The Dow is price-weighted, which means that a stock currently selling for $100 has twice the impact of a stock trading for $50.

The NASDAQ Composite Index is another cap-weighted index.  It includes all stocks (including ADRs, REITs, etc) listed exclusively on the NASDAQ.

The NYSE Composite Index is similar to the NASDAQ: the only difference being that it tracks all issues on the NYSE rather than the NASDAQ.

The Russell 2000 is the best-known of the numerous Russell indicies.  It tracks the 2000 smallest companies (by market-cap) of the larger Russell 3000 Index (which tracks the 3000 largest issues in the US).  It is used to track relative performance of small-cap stocks.  Both the Russell 2000 and the Russell 3000 are cap-weighted.