Market Indexes

Introduction to Stocks

Because no single index can tell you everything you need to know about the stock market, there are indexes to track practically everything.

The stock market's every move is reported in 29 different indexes daily in The Wall Street Journal. Various indexes track market highs and lows, the changes from the previous trading day, and over the last year, plus the volume of trading and dozens of other details.

The NYSE Composite Index is designed to measure the performance of all common stocks listed on the NYSE, including ADRs, REITs and tracking stocks. In January 2003 the NYSE reintroduced the NYSE Composite Index under a new methodology that is fully transparent and rule-based. Under the new methodology, all closed-end funds, ETFs, limited partnerships and derivatives are excluded from the index.

As of year-end 2004, the NYSE Composite consists of over 2,000 U.S. and non-U.S. stocks. It is a measure of the changes in aggregate market value of all NYSE-listed common stocks, adjusted to eliminate the effects of capitalization changes, new listings and delistings. The index is weighted using free-float market capitalization and calculated on both price and total return basis.

The S&P 500 is a stock market index containing the stocks of 500 Large-Cap corporations, most of which are American. The index is the most notable of the many indices owned and maintained by Standard & Poor's, a division of McGraw-Hill. S&P 500 is used in reference not only to the index but also to the 500 actual companies, the stocks of which are included in the index.

All of the stocks in the index are those of large publicly held companies and trade on the two largest US stock markets, the New York Stock Exchange and Nasdaq.

The Nasdaq Composite is a stock market index of all of the common stocks and similar securities (e.g. ADRs, tracking stocks, limited partnership interests) listed on the NASDAQ stock market, meaning that it has over 3,000 components. It is highly followed in the U.S. as an indicator of the performance of stocks of technology companies and growth companies. Since both U.S. and non-U.S. companies are listed on the NASDAQ stock market, the index is not an exclusively U.S. index.

Russell 2000's family of global equity indexes, including the industry-leading U.S. equity indexes (note that Russell uses "indexes" rather than "indices"), allows investors to track the performance of distinct market segments worldwide.

Many investors use mutual funds or exchange-traded funds based on the Russell Indexes as a way of gaining exposure to certain portions of the U.S. stock market. Additionally, many investment managers use the Russell Indexes as benchmarks to measure their own performance. Russell's innovative index design has led to more assets benchmarked to its U.S. index family than all other U.S. equity indexes combined. As of May 2007, Russell's indexes had US$4 trillion in assets benchmarked to them and accounted for 52 percent of assets benchmarked by institutional investors.

Value Line, Inc. is a New York corporation founded in 1931 by Arnold Bernhard, best known for publishing the The Value Line Investment Survey ®, a stock analysis newsletter that's updated weekly and kept by subscribers in a large black or green binder.

The Dow Jones Wilshire 5000 Composite Index, more simply the Dow Jones Wilshire 5000, is a market capitalization-weighted index of the market value of all stocks actively traded in the USA.

The index is intended to measure the performance of all publicly traded companies based in the United States having "readily available price data." Hence the index includes nearly all common stocks, REITs, and limited partnership shares traded primarily on the New York Stock Exchange, NASDAQ, or American Stock Exchange.