NASDAQ, S & P and Dow Jones differences?

I don't know what the difference is between these three, what they measure and how to read the data that accompanies it. Would someone please help me distinguish or provide me with some websites that have additional information?

1 Answer

  • csanda
    Lv 6
    1 decade ago
    Favorite Answer

    Technically, NASDAQ is an exchange while Standard & Poors is a credit rating agency. Dow Jones is a news agency.

    I think you are asking about the three common indices:

    NASDAQ Composite

    S&P 500

    Dow Jones Industrial

    An index shows the relative value of a group of stocks.

    The Nasdaq composite is every company listed on the Nasdaq exchange (as opposed to the NYSE or American exchange). It is market weighted.

    The S&P 500 is 500 of the largest companies listed in the US. They are not necessarily THE 500 biggest, but 500 of the biggest. Their inclusion is solely based upon the decision of Standard & Poors. They can be from the NYSE or NASDAQ. It is market weighted.

    The Dow Jones Industrial Average is 30 companies included by Dow Jones. They have historically included only industrial companies, but now include many non-industrial companies. This index is based on stock from both the NYSE and NASDAQ. This index is PRICE weighted, not market weighted. As a result, it has a higher weighting of higher price denominated stocks. For example, 3M has more than double the weighting of a larger company like GE (86 vs. 37) in the index.

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