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.

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

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

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