The Unites States possesses the largest range of stock price indices, including:
Dow Jones – The Dow Jones Industrials or the Dow Jones Industrial Average (DJIA), the main US index, measures the movements of the stock prices of 30 blue chip companies. It is calculated by adding the New York closing prices and adjusting them by a “current average divisor” (an adjustable figure formulated to preserve the continuidy of the Index over time amid changes in its component stocks. Dpecialist indices are also provided for 3 other groups of stocks: Home Bonds, Transport (20 airlines, railroads and trucking companies), and Utilities (15 gas and power companies). For all four indices, the information provided comprises: the closing figures for the day alongside those for the previous 3 trading days; the highest and lowest trading level for the year with dates; and the highest and lowest trading level since compilation began, also with the respective dates.
Standard & Poor’s (S&P) – This comprises 3 indices. The Composite Index consists of 500 companies listed on the NYSE; the other two indices cover the Composite Industrials (400 companies) and Financial stock sub-groups (40 companies). The remaining companies are 20 transport companies and 40 utilities. While not as comprehensive as the NYSE Composite nor as famous as the DJIA, the S&P 500 is generally regarded as a more comprehensive guide to the US market, accounting for nearly 80% of the total NYSE capitalisation. Like the FT-SE Actuaries series, individual companies are weighted according to their market capitalisation, allowing for the fact that some stocks exhibit a greater influence over the market than others.
NYSE Composite Index – This is the most broadly based of the US indices, covering all common stocks on the exchange.
AMEX Market Value Index – An index of over 800 companies listed on the American Stock Exchange.
NASDAQ – This index is freqently used as an indicator of the market for stocks in technology companies, including computer-related, internet-related and biotechnology.
The Dow Jones is the most widely followed indicator in the United States,
providing a guide to the daily mood of the industrial markets (“market
sentiment”), as does the FT-30 in the United Kingdom. However it is not
an index, rather it is an “average” and, since it is not adjested
for inflation, it can only reliably indicate the overall direction of movement.