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 Subject: Stock Market Category: Business and Money > Economics Asked by: hayley1869-ga List Price: \$15.00 Posted: 14 Sep 2006 14:20 PDT Expires: 14 Oct 2006 14:20 PDT Question ID: 765381
 ```Dear Sir / Madam, Could you explain to me exactly what the stock market index is that appears on television after the News and how does on read the stock market due to this, Thank you, Jeremy M Newton, from S.Ireland.```
 Subject: Re: Stock Market Answered By: leader-ga on 14 Sep 2006 17:43 PDT Rated:
 ```Dear hayley1869-ga: A stock market index that appears on Television after the News is basically the total value of all the stocks that are listed in that Market Index. The most famous Market Index in the world is Dow, and S&P 500 for United States; FTSE 100 for Britain; CAC 40 for France; DAX for Germany and Nikkei 225 for Japan. In Ireland the main stock market index is ISEQ ? 20. Generally, the stock market index represents the current state of the economy. It is assumed that greater the numbers better the economy and vice versa but it might not be the case always. ****Remember that the reason that you can gauge the current state of the economy by just looking at these numbers is because the entire main stock market index usually consists of the stocks of the largest companies.**** Let us say that you live in United States and at the end of the news you see that S&P 500 is 1316.00. This means that the value of all the stocks in S&P 500 (there are 500 stocks in this index, also evident by name) is equal to 1316.00. That is stock 1 + stock 2 + stock 3 + stock 4 + stock 5??.stock 500 = 1316.00. In Great Britain the main stock market index is FTSE 100 (100 stocks as evident by name). Let us say that the value of FTSE 100 was 5877.00, yesterday.Today, the value goes up to 5900.00. This means that the total value of all the stocks in FTSE 100 has gone up by 23.00 points. Simply put stock 1 + stock 2 + stock 3 + stock 4 + stock 5??.stock 500 = 5900.00. There are many other stock indices beside the main ones. It is up to the investor to decide what market index he is interested in. I will highly recommend that you check out the following page for further information. It will provide you with a detailed overview of the Market Index: http://en.wikipedia.org/wiki/Stock_market_index (Wikipedia) Also, check out the Yahoo Finance page for more in-depth info on stocks: http://finance.yahoo.com/ And, also take a look into the main International Indices at Yahoo Finance: http://finance.yahoo.com/international Useful Terms in Google ?how to read stock market? ?Stock market index? Useful Links Stocks Basic - Introduction http://www.investopedia.com/university/stocks/ Stock Table ? How to read them (US Securities & Exchange Commission) http://www.sec.gov/answers/stocktables.htm Please let me know if you have any further questions. I will be glad to help you. Sincerely, Leader-ga```
 hayley1869-ga rated this answer: `Thank you,Very good for beginners like me`

 ```>>That is stock 1 + stock 2 + stock 3 + stock >>4 + stock 5??.stock 500 = 1316.00. That is not quite right. The Dow is like this in that it is a simple average of the prices. Therefore, higher priced stocks effect the index more. The s&p is weighted by market cap. So the formula would be more like: (mkt cap stock 1/ total market cap of index)*stock 1 + .... This is why no one on wall street takes the dow seriously. The broad indicies that really matter are the s&p 500 and the Russel 2000, which is for small caps. btw, mkt cap = market capitilation. This the number of shares outstanding * the price of a share. "Small cap" means different things to different people, but figure it is somewhere between 250 million and a billion.```
 ```Hayley Have you seen the latest comment on Question ID: 742350```