9/22/2023 0 Comments Acorns stock price![]() There are several key differences between the S&P 500 and other leading stock market indexes like the Dow Jones Industrial Average, popularly known as the “Dow,” and the NASDAQ Composite, which is different from the NASDAQ stock exchange. How does the S&P 500 differ from other stock market indexes? In terms of the industry sectors encompassed in the S&P 500, the breakdown consists of: Information Technology (30.3%), Communication Services (17.6%), Health Care (14.2%), Financials (11.1%), Consumer Discretionary (9.4%), Consumer Staples (8.4%), Energy (4.5%), and Industrials (4.4%). A, Berkshire Hathaway B, Johnson & Johnson, JP Morgan Chase & Co., Alphabet Inc. According to the S&P Dow Jones Indices, the Top 10 companies in the S&P 500 by index weight as of mid-2019 are: Microsoft Corp., Apple Inc., Amazon, Facebook Inc. There are a wide range of industries within the S&P 500. What are the top companies in the S&P 500? portion of fixed assets and revenues needs to constitute at least 50 percent, the market cap must be at least $8.2 billion, the company must have positive earnings in four consecutive quarters, including the most recent quarter, stock needs to trade for a reasonable price and the stock must also be listed on the New York Stock Exchange (NYSE), NASDAQ or Investors Exchange (IEX). portion of fixed assets and revenues has to be available to the public, the U.S. companies are considered, at least 50 percent of the company’s stock has to be available to the public, the U.S. The S&P Dow Jones Indices committee determines a corporation’s eligibility based on size, industry and liquidity as well as the following criteria: only common stocks (or shares) of U.S. Like the ever-fluctuating nature of the stock market, the S&P 500 also shifts due to the companies featured in the index’s available shares and stock prices. What’s the criteria for companies included in the S&P 500? Since the S&P 500 is weighted by a float-adjusted cap, only those shares available to investors are calculated instead of all of a company’s outstanding shares: Shares held by other publicly traded companies, government agencies or other shareholders are excluded. The S&P 500 is rebalanced quarterly in March, June, September and December. ![]() There’s a constant recalibration of the index driven by the shares that are traded. In other words, larger companies in the S&P 500 have a greater impact on the index’s price performance than a company with a comparatively smaller market cap.įor example, a company like Facebook with a current market cap of $572 billion would account for 10 times the weight in the S&P 500 index than a company whose market cap is $57 billion. The index assigns each company’s weight based on the value of all the shares of stock available. Market cap is determined by multiplying the number of shares issued by the company’s stock price. market-cap-weighted stock market index, meaning it’s weighted relative to each company’s market capitalization. How is the S&P 500’s market cap calculated? Today, the S&P 500 index covers approximately 80 percent of available market capitalization (or the total dollar market value of all listed companies’ outstanding shares). For instance, Google’s parent company Alphabet has Class A and Class C shares. Officially created in 1957 by financial companies Standard and Poor’s, the index is now owned by the S&P Dow Jones Indices, a joint venture between S&P Financial (formerly known as McGraw Hill Financial), global markets company CME Group and media company News Corp., which owns Dow Jones.ĭespite being referred to as “500,” there are actually 505 listed stocks because a methodology change led to more companies having multiple listings in the index due to multiple share classes. Here’s an overview of the S&P 500 index so that you can educate yourself as an investor. In the past 10 years, it’s grown about 330%. In 2019, the S&P 500 has closed at an all-time high several times, trading above 3,000 for the first time on July 12. ![]() If you want to school yourself on the stock market, it makes sense to pay attention to the S&P 500. companies ranging from Microsoft to Facebook. ![]() The index measures the stocks of 500 of the largest publicly traded, or large-cap, U.S. The S&P 500 is considered to be a good benchmark for the general health of the U.S. ![]()
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