There are approximately 5,000 U.S. indexes. The three most widely followed indexes in the U.S. are the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite. The Wilshire 5000 includes all the stocks from the U.S. stock market.
Probably the world's best-known and most widely used stock market index, the Dow Jones Industrial Average (DJIA) consists of 30 largest traded companies in the United States. Many investors use market indices for managing their investment portfolios and following the financial markets.
Investors follow different market indexes to gauge market movements. The three most popular stock indexes for tracking the performance of the U.S. market are the Dow Jones Industrial Average (DJIA), S&P 500 Index, and Nasdaq Composite Index.
The Dow tracks the value of 30 large companies which tend to be blue-chip firms that are household names. The S&P 500 tends to be broader, hoping to have a bigger representation of companies from various sectors and industry groups. And the Nasdaq composite includes only stocks that are traded on the Nasdaq market.
So, if you are looking to own a more diversified basket of stocks, the S&P 500 will be the right fit for you. However, those who are comfortable with the slightly higher risk for the extra returns that investing in Nasdaq 100 based fund might generate will be better off with Nasdaq 100.
The S&P 500 and Dow Jones Industrial Average are two of the top large-cap indexes, but others include the S&P 100, the Dow Jones U.S. Large-Cap Total Stock Market Index, the MSCI USA Large-Cap Index, and the Russell 1000.
NASDAQ is a stock index consisting of more than 3000 companies whereas DJIA (Dow Jones Industrial Average) consists of only 30 major companies traded on the NYSE and NASDAQ.
"Indices" is used when referring to mathematical, scientific and statistical contexts. It is used to refer to a numbers, symbols, and figures comparing a value to a standard. "Indexes" is usually used in reference to written documents, such as bibliographical or citation listings.
There are nearly 3.3 million stock market indices around the world, according to new research from the Index Industry Association (IIA).
A blue-chip index is an index that tracks the shares of well-known and financially stable publicly traded companies known as blue chips. Blue-chip stocks provide investors with consistent returns, making them desirable investments, and are considered a gauge of the relative strength of an industry or economy.
In contrast, the DJIA is composed of a mere 30 stocks, mainly of companies found on the New York Stock Exchange, with only a couple of Nasdaq-listed stocks such as Apple (AAPL), Intel (INTC), Cisco (CSCO), and Microsoft (MSFT).
Blue-chip stocks are ones instantly recognized as established, dominant names in their respective industries. Take Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and The Coca-Cola Company (NYSE:KO), for example.
Table of Contents. S&P 500, abbreviation of Standard and Poor's 500, in the United States, a stock market index that tracks 500 publicly traded domestic companies. It is considered by many investors to be the best overall measurement of American stock market performance.
The S&P 500 Index, or Standard & Poor's 500 Index, is a market-capitalization-weighted index of 500 leading publicly traded companies in the U.S. It is not an exact list of the top 500 U.S. companies by market cap because there are other criteria that the index includes.
Global stock market indexes help investors and analysts describe the market and compare different investments. There are three types of stock market indexes, including global stock market indexes, regional stock market indexes, and national stock market indexes.
S&P 500 index
S&P 500 is one of the many S&P Dow Jones Indices and is considered to be the top-most single indicator of large-cap US stocks. S&P 500 Index, the first US market-cap-weighted stock market index, was created way back in 1957 and remains one of the oldest indexes with over a 70-year live track record.
The S&P 500 is considered a better reflection of the market's performance across all sectors compared to the Nasdaq Composite and the Dow. The downside to having more sectors included in the index is that the S&P 500 tends to be more volatile than the Dow.
Nasdaq-100 Historical Returns
In the last 10 years, the Nasdaq 100 Index has generated an absolute return of 702.29% with a CAGR of 21.76%.
The DJIA tracks the stock prices of 30 of the biggest American companies. The S&P 500 tracks 500 large-cap American stocks. Both offer a big-picture view of the state of the stock markets in general.
For example, Coca-Cola is a blue chip company that might not suffer from a recession because many choose to drink its products, regardless of economic conditions. Blue chip companies are known to have very stable growth rates.
Examples of blue-chip stocks
Apple. Coca-Cola. Disney. IBM.