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Dow The Dow Jones Industrial Average is the best-known of the U.S. stock-market indexes. It is a price-weighted average of 30 blue chip stocks that mostly trade on the New York Stock Exchange. It is primarily an indicator of how shares of the largest U.S. corporations are performing. Because it is price-weighted, it is affected more by higher-priced stocks than lower-priced stocks regardless of how many shares are outstanding. Even though it measures the prices of only 30 large U.S. companies, it is the most-quoted stock-market index. When people ask how the market is doing, they are usually asking about the Dow. Because of this, it has a psychological impact on the entire stock market. There is also a Dow Jones Utility Average and a Dow Jones Transportation Average. NASDAQ The NASDAQ Composite Index is a capitalization-weighted index of all stocks that trade on the NASDAQ National Market System. Because NASDAQ trades stocks of companies of widely varied sizes, a capitalization-weighted index gives more influence to the larger companies. Nevertheless, the NASDAQ Composite Index is considered an indicator of the performance of smaller companies and technology companies. People often say the NASDAQ is "tech heavy." S & P 500 The Standard & Poor’s 500 Index consists of 500 blue chip stocks that are separated by industry so all industries are represented. The index tracks the stocks of 400 industrial companies, 60 transportation companies and 40 financial companies. Most portfolio managers compare their performance results to the S & P 500. Many "index" mutual funds are structured to replicate the performance of the S & P 500.
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