What’s the Difference Between the Dow, S&P 500, and Nasdaq?
When stock market pundits talk about market outlook and performance, they’ll often look to the movement of three benchmark indices: the S&P 500, The Dow Jones Industrial Average, or the Nasdaq.
In this infographic, the key differences between these are outlined.
The Dow Jones Industrial Average is the oldest of the three, dating back to 1896, and tracks the movement of 30 large, public US companies. Today, the index is not really as “industrial” as the name entails. Many of the companies included in the index such as Goldman Sachs, Visa, or McDonald’s focus their business in other categories such as finance or consumer goods.
The S&P 500 is a stock market index composed of 500 large companies having common stock listed on the New York Stock Exchange (NYSE) or Nasdaq. Founded in 1923, it is now considered one of the best overall indicators of the US stock market.
The Nasdaq Composite is based on the 3000+ equities traded on the Nasdaq exchange. Founded in 1971, the index is closely followed for its representation of technology and high-growth companies.
Original graphic from: Tim Sykes
