Learn What Market Indexes Say About Investing If you read or listen to the financial media, you might get the impression that the Dow Jones Industrial Average, usually referred to as the Dow, represents the pulse of the market. Other stock indexes like the S&P 500 or the Nasdaq Composite also get mentioned more or less often, depending on their numbers. These and other reported indexes can give you a good amount of information and insight to use in making more informed investing decisions. Explaining Index Numbers First, take a look at what an index number represents. Although there are different ways to calculate index numbers, the numbers always represent a change from an original or base value. The base value represents the weighted-average stock price of all the stocks that make up the index. The index number has much less importance or meaning than its percent change over time. This movement up or down gives you an idea of how the index is perfor...
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