A <a href='/Stock_Market'>stock market</a> <a href='/Index'>index</a> is a measurement of the value of a section of the <a href='/Stock_Market'>stock market</a>. It is calculated from the prices of selected stocks, which are weighted according to their market capitalization.
A <a href='/Stock_Market'>stock market</a> <a href='/Index'>index</a> is a statistical measure of the performance of a group of stocks, typically a market or a sector. It is calculated from the prices of selected stocks (typically a weighted average). It is a tool used by investors and financial managers to describe the market, and to compare the return on specific investments.<br><br>The most common <a href='/Stock_Market'>stock market</a> indices are the Dow Jones Industrial Average (<a href='/DJIA'>DJIA</a>), the <a href='/S&P_500'>S&P 500</a>, and the <a href='/Nasdaq'>Nasdaq</a> Composite. The <a href='/DJIA'>DJIA</a> is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the <a href='/Nasdaq'>Nasdaq</a>. The <a href='/S&P_500'>S&P 500</a> is a market-cap weighted <a href='/Index'>index</a> of 500 large-cap stocks traded on the New York Stock Exchange and the <a href='/Nasdaq'>Nasdaq</a>. The <a href='/Nasdaq'>Nasdaq</a> Composite is a market-cap weighted <a href='/Index'>index</a> of all stocks traded on the <a href='/Nasdaq'>Nasdaq</a>.<br><br><a href='/Stock_Market'>Stock market</a> indices are used to measure the performance of a particular market or sector. They are also used to compare the performance of different markets or sectors. For example, the <a href='/S&P_500'>S&P 500</a> is often used to compare the performance of the US <a href='/Stock_Market'>stock market</a> to other markets around the world.<br><br><a href='/Stock_Market'>Stock market</a> indices are also used to measure the performance of a particular stock or group of stocks. For example, the Dow Jones Industrial Average is often used to measure the performance of the 30 stocks that make up the <a href='/Index'>index</a>. Similarly, the <a href='/S&P_500'>S&P 500</a> is often used to measure the performance of the 500 stocks that make up the <a href='/Index'>index</a>.<br><br>In addition to measuring the performance of a particular market or sector, <a href='/Stock_Market'>stock market</a> indices can also be used to measure the performance of a particular stock or group of stocks. For example, the <a href='/S&P_500'>S&P 500</a> is often used to measure the performance of the 500 stocks that make up the <a href='/Index'>index</a>. Similarly, the <a href='/Nasdaq'>Nasdaq</a> Composite is often used to measure the performance of all stocks traded on the <a href='/Nasdaq'>Nasdaq</a>.<br><br><a href='/Stock_Market'>Stock market</a> indices are important tools for investors and financial managers. They provide a way to measure the performance of a particular market or sector, and to compare the performance of different markets or sectors. They also provide a way to measure the performance of a particular stock or group of stocks.