A Brief Look At Stock Market Index

A longtime resident of New York with a professional background in the financial services sector, Cherine Allaithy has served as a banker with JPMorgan Chase since 2008. Cherine Allaithy is also experienced in mortgages, auto and life insurance, and the stock market index.

A key representative of the financial market, the market index is a theoretical portfolio of investment holdings. The index measures and tracks the performance of a stock market segment such as energy, transportation, or technology. Prices of underlying holdings in the segment of interest help determine a market index. Indexes are critical evaluation tools for investors since they gauge market movements.

In the United States, two of the most popular indexes for tracking the performance of stock markets are the S&P 500 Index and Dow Jones Industrial Average (DJIA). The S&P 500 represents 500 large companies in the U.S. economy. The DJIA measures the performance of 30 large stocks of U.S. industrial companies.