Stock indexes track the performance of specific stocks considered representative of a particular market or sector of the U.S. stock market or economy. Some indexes are “weighted,” or based on market capitalization (market value), and some are based on other factors.

The Dow Jones Industrial Average (DJIA) is perhaps the most well known index, since it is one of the oldest and most widely quoted. It is comprised of 30 blue chip stocks from a wide range of companies with a history of successful growth. It does not include transportation or utility stocks, which are included in separate indexes. The stocks included do not change very often, and the DJIA is not a weighted index. This means it does not consider market capitalization. The 30 stocks listed represent approximately one fifth of the market value of all U.S. stocks.

The S&P 500 is widely regarded as the standard for measuring large-cap U.S. stock market performance. It includes a representative sample of leading companies within the leading industries in the U.S. economy. Stocks are chosen based on industry group, market size, and liquidity. The index is based on market capitalization and is used by approximately 97% of U.S. money managers and pension plan sponsors.

The Russell 2000 is a weighted index that measures the performance of the 2000 smallest publicly traded U.S. companies in terms of market capitalization that are included on the Russell 2000 Index.

The Dow Jones Wilshire 5000 measures the performance of all U.S. headquartered equity securities. Over 7000 capitalization weighted security returns are used to adjust the index. This index is designed to measure the entire U.S. stock market.

Many indexes are used to measure different market conditions. A list of indexes can be found on the NASDAQ Web site.