According to the Library of Congress, in 1884 the first Index was created. It was originally known as the Dow Jones Railroad Average and consisted of 11 stocks, including the New York Central and Union Pacific, and two non-rails, Pacific Mail Steamship and Western Union.

Market indexes are indicators for global and country-specific economies. Leading U.S. stock market indexes include the Dow Jones Industrial Average, the Standard & Poor's 500, and the Nasdaq Composite. Each index vary in size, with some tracking just a handful of stocks and others looking at thousands. Each serves a unique purpose because different investors are interested in different sectors.

They make it easier to know how the market is performing without having to follow the ups and downs of every individual stock. They also form the basis for passive index investing completed through exchange-traded funds (ETFs).

The Wilshire 5000 includes all stocks listed on the U.S. stock market.

Within an index, each stock has a weighting assigned to it. There are three different ways that indexes typically assign weightings to their stocks:

• Price-weighted indexes give more weight to companies with higher stock prices.
• Market-capitalization-weighted indexes give more weight to companies with higher market capitalizations.
• Equal-weight indexes give the same weighting to each stock, regardless of price, market capitalization, or any other factor.

Stock market indexes make it easier to know how the market is performing without having to follow the ups and downs of every individual stock. Learn more about some of the top US stock market indexes.

What is the S&P 500: Standard & Poor's 500 Index?

The S&P 500, one of the most widely followed U.S stock market index, consists of 500 companies across 11 sectors: Healthcare, Materials, Real Estate, Consumer Staples, Consumer Discretionary, Utilities, Energy, Industrials, Consumer Services, Financials, and Technology.

What is the DJIA: Dow Jones Industrial Average?

Created in 1896, the Dow Jones Industrial Average is one of the major U.S. market indexes. Price-weighted, the DJIA measures 30 U.S. "blue chip" publicly owned companies trading on the New York Stock Exchange and the Nasdaq.

What is the NASDAQ Composite Index?

The NASDAQ Composite is a price-weighted index and measures 3,000+ companies listed on the NASDAQ stock exchange which provides investors with a gauge of how well stocks, particularly technology stocks, are faring.

What is the NYSE (New York Stock Exchange) Composite Index?

The NYSE Composite Index traces its origins to the Buttonwood Agreement signed on May 17, 1792. The exchange became a public entity on March 8, 2006.

What is the Russell 3000 Index?

The Russell 3000 was established on January 1, 1984. It covers and tracks the performance of the 3,000 largest U.S. traded stocks.

What is the Russell 2000 Index?

Established on January 1, 1984, the Russell 2000 is a subset of the Russell 3000, and is widely used to track the largest 2,000 U.S. companies with the largest market capitalizations.

What is the Russell 1000 Index?

Established on January 1, 1984, the Russell 1000 is a subset of the Russell 3000, and is widely used to track the largest 1,000 U.S. companies with the largest market capitalizations.

---

Ready to invest in digital marketing for your business? Let's work together to create a plan designed around optimizing your business directory listings, while incorporating search engine optimization (SEO), content marketing, search engine marketing, lead generation and website design to ensure that your accounting practice is optimized to help you reach your goals.