The S&P 500

The S&P 500 is composed of 500 stocks of large firms in the American capital market.
While the Dow serves as an indicator for the “heaviest” companies on the market, the S&P reflects the entire American economy and capital market.
The S&P is based on both the stock price and market cap of each company.
Assuming that the base index (i.e. the first index published) was 100 points (=100%), subsequent indices increase or decrease according to the cumulative increase or decrease of the stocks included in the index.
For example, if the base value of the index was $25 billion = 100 points, and the total value of the index rises by 20% to $30 billion, the index will be 120 points.
The greater the weight of an individual company in the index, the more it influences the level of the index.

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This entry was written by admin, posted on May 1, 2009 at 2:38 pm, filed under Stock Exchange. Bookmark the permalink. Follow any comments here with the RSS feed for this post. Both comments and trackbacks are currently closed.