The major US stock market indices that indicate where the rest of the world’s markets are heading

Julie Brownlee, Fsp Invest, 08 Apr. 2014

Tags: stock market indices, us stock market indices, international stock market indices, s&p 500 index, nasdaq composite index, dow jones industrial average, stock market,

The US economy is the largest in the world. The performance of its two largest stock markets have a major bearing on the rest of the financial markets, including the Johannesburg Stock Exchange. As the old saying goes, when the US sneezes the rest of the world catches a cold. One way to gauge the performance of these markets is to look at their indices. So let’s take a closer look at the three major US stock market indices…

The Dow Jones Industrial Average

The Dow Jones Industrial Average is one of the closely watched US indexes. The Dow Jones is also the original stock market index.

Making up the Dow Jones are only 30 companies. These companies come from the New York Stock Exchange (the world’s largest stock market) and the NASDAQ, explains Wikipedia.

These companies include well-known corporate giants such as American Express, Intel and McDonalds.

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The S&P 500 Index

The Standard & Poor’s 500 is a broader based index than the Dow Jones. As its names suggests it includes 500 companies. These companies also come from the New York Stock Exchange and the NASDAQ, says Wikipedia.

Due to the large number of companies included in the S&P 500, analysts and investors consider it to be one of the best indicators of what’s happening in the US markets.

The NASDAQ Composite Index

The NASDAQ Composite Index reflects the performance of the NASDAQ. The NASDAQ is the world’s second largest stock market, according to Wikipedia.

The NASDAQ Composite Index includes over 3,000 companies and securities. The NASDAQ focuses on technology and growth stocks, so this index is a leading indicator of the performance of these types of shares.

So there you have it, the major US stock market indices that indicate where the rest of the world’s markets are heading.

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