8 Major Published Reports Analysis a Dow Jones Industrial Average DIJA 30 stocks b Dow Jones Transportation Average 20 stocks c Dow Jones Utilities Average 15 public utility stocks d Dow Jones 65 Stock Composite Average 30 industrial 20 transportations 15 utilities I These are often cited with DIJA E S P 500 Index 500 large sized companies f S P 100 index 100 large sized companies g S P 400 MidCap Index 400 medium sized h S P 600 Small Cap 600 small I S P 1500 Super Comp Index SP500 SP400 SP600 j Industrial index 400 industrial firms k NYSE composite Index 2100 stocks l Amex composite index m NASDAQ Stock Market Indexes 4000 domestic common stock n Value Line Indexes composite 1700 stocks o Frank Russell 1000 1000 largest companies p Russell 2000 2000 small to medium sized stocks 9 Types of Averages Indexes o o o o o o o o o o o o o o o Reflect the arithmetic average price behavior of a representative group of stocks at a given point in time Measure the current price behavior of a representative group of stocks in relation to a base value set at an earlier Stock market averages and indexes measure the general behavior of stock prices over time Averages Dow Jones Industrial Average DJIA An average made up of 30 stocks selected for total market value and broad public ownership The group consists of high quality stocks whose behaviors are believed to reflect overall market activity The value of the DJIA is the sum of the closing share prices of the 30 stocks included in it divided by a divisor Occasionally a merger bankruptcy or extreme lack of activity causes a change in the makeup of the average Dow Jones Transportation Average Based on 20 stocks including railroads airlines freight forwarders and mixed transportation companies Dow Jones Utilities Average computed using 15 public utility stocks Dow Jones 65 Stocks Composite Average made up of the 30 industrials the 20 transportations and the 15 utilities Indexes point in time Dow Jones U S Total Stock Market Index A market weighted index Market weight means that companies with large total market values have the most effect on the index s movement This index measures the performance of all equity securities issued by U S companies that have readily available price data Standard Poor s Indexes Publishes 6 major common stock indexes S P indexes contain many more shares than the Dow averages do and all of them are based on market values rather than share prices Therefore many investors feel that the S P indexes provide a more broad based and representative measure of general market conditions and do the Dow averages The 6 major common stock indexes published by S P are 500 index 100 index the industrial index 400 midcap index 600 smallcap index and 1500 supercomp index NYSE Amex and Nasdaq Indexes Three indexes measure the daily results of the New York Stock Exchange NYSE the NYSE Amex Exchange and the National Association of Securities Dealers Automated Quotation NASDAQ system Value Line Index Publishes a number of stock indexes constructed by equally weighting the price of each stock This is accomplish by considering only the percentage changes in stock prices This approach eliminated the effects of differing market price and total market value on the relative importance of each stock in the index Bond Indexes The Dow Jones Corporate Bond Index includes 96 bonds 32 industrial 32 financial and 32 utility telecom bonds It reflects the simple mathematical average of the closing prices for the bonds 11 Major Characteristics to of Bonds Bond Yield the return an investor would receive on a bond if it were purchased and held to maturity Reported at annual rates of return Bonds are graded from high to low grade based on riskiness with the company seeking the money Dow Jones Corporate Bond Index includes 96 bonds 32 industrial 32 financial and 32 utility telecom bonds Reflects the simple average of the closing prices of the bonds Based on value of 100 and published daily 20 Attributes of NYSE DOW The New York Stock Exchange Also referred to as the Big Board The NYSE is a listed exchange where a lot of trading is done face to face on the trading floor The flow of an order starts first at the brokerage firm then down to the broker on the floor at their trading post This person is also known as the specialist and they match the buyers and sellers of a given stock At the time of the actual sale the price is determined via auction where the current price is the greatest amount a buyer is willing to pay and the lowest price at which one is willing to sell All transactions on the floor of the exchange occur through an auction process The goal is to fill all buy orders at the lower price and fill all sell orders at highest price Members interested in purchasing a given security publicly negotiate a transaction with members interested in selling that security The job of the designated market maker DMM an exchange member who specializes in making transactions in one or more stocks is to manage the auction process The DMM buys or sells to provide a continuous fair market Firms such as Merrill Lynch designate officers to hold trading licenses Only such designated individuals can make transactions on the floor of the exchange The two main types of floor brokers are commission and independent brokers o o Dow Jones Industrial Average DJIA An average made up of 30 stocks selected for total market value and broad public ownership The group consists of high quality stocks whose behaviors are believed to reflect overall market activity The value of the DJIA is the sum of the closing share prices of the 30 stocks included in it divided by a divisor Occasionally a merger bankruptcy or extreme lack of activity causes a change in the makeup of the average Dow Jones U S Total Stock Market Index A market weighted index Market weight means that companies with large total market values have the most effect on the index s movement This index measures the performance of all equity securities issued by U S companies that have readily available price data 8 Major publish reports analysis The Dow Jones also publishes numerous indexes The first one listed the DJ U S Total Stock Market Index is a market weighted index Market Weighted means that companies with large total market values have the most effect on the index s movement The Dow Jones U S Total Stock market Index measures the performance of all equity securities issued by the U S companies that have readily
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