Category: Stock Market

We keep on hearing news that Dow is up and so the market is great and vice versa. This might give you an impression that the Dow Jones Industrial Average or Dow is the heart of the market. Then you also hear about other indices like S&P 500 or the Nasdaq Composite further confusing you whether to be positive about the market or not. Lets try to understand these indices and what they try to tell us about the market. What is an Index? A stock market index is a way of measuring performance of certain stocks in stock market. Stock market index by itself is not such an important number. What is important is the change from an original or base value. An up or down movement gives an indicator of how the particular segment of stock that the index covers is performing and thus how the overall stock market is performing. There are various way of classifying stocks into stock market indices.  [...]