Updating world stock market indices alldating com

Posted by / 25-Sep-2016 05:14

Because the general attitude toward large-cap stocks often differs from the attitude toward small-cap stocks, international stocks or technology stocks, the Dow should not be used to represent sentiment in other areas of the marketplace.On the other hand, because the Dow is made up of some of the most well-known companies in the U.S., large swings in this index generally correspond to the movement of the entire market, although not necessarily on the same scale.The DJIA is what's known as a price weighted index.It was originally computed by adding up the per-share price of the stocks of each company in the index and dividing this sum by the number of companies - that's why it's called an average.The DJIA represents about a quarter of the value of the entire U. stock market, but a percent change in the Dow should not be interpreted as a definite indication that the entire market has dropped by the same percent.This is because of the Dow's price-weighted function.

The basic problem is that a change in the price of a 0 stock in the index will have the same effect on the DJIA as a change in the price of a stock, even though one stock may have changed by 0.8% and the other by 5%.A change in the Dow represents changes in investors' expectations of the earnings and risks of the large companies included in the average.By gaining a clear understanding of how indices are created and how they differ, you will be on your way to making sense of the daily movements in the marketplace.Here we'll compare and contrast the main market indices so that the next time you hear someone refer to "the market," you'll have a better idea of just what they mean.The Dow Jones Industrial Average (DJIA) is one of the oldest, most well-known and most frequently used indices in the world.

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It includes the stocks of 30 of the largest and most influential companies in United States.

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