US stock indices
In the past. article on stock indices We have traveled around the world with S&P. We have flashed through the stock indices of Asia, Europe, Australia, and Latin America calculated by this agency. But it's time to return to where we started our journey - the United States. Today we are going to familiarize ourselves with with the U.S. stock market indices.
There are several stock exchanges in the USA, but we are interested in the three most famous ones. Each of them publishes its own stock index (and even more than one).
NYSE Index
Первая из фондовых бирж, о которой мы поговорим, — New York Stock Exchange (abbreviated NYSE). The shares of thousands of companies are traded on this exchange. Based on the prices of these shares, the NYSE index.
If we present the mechanism of its calculation in a very simplified way, we can say that the value of this index is equal to the average price of all shares quoted on a given exchange. NYSE Index even expressed not in points, like other indices, but in the national currency - dollars. In reality, of course, not everything is so simple: the size of companies is taken into account in the calculations, otherwise a relatively small company will affect the index as much as the world's largest corporations.
AMEX Index
Another stock exchange in America is called American Stock Exchange (аббревиатура — AMEX). This exchange publishes several dozens of indices, but the most famous of them is the so-called Major Market Index.
This index is calculated in a very simple way: as an arithmetic average of twenty leading corporations in America. In a sense, this index is analogous to the familiar Dow Jones index. Moreover, the AMEX Major Market Index and the Dow Jones are much the same in terms of the composition of its constituent companies.
NASDAQ Index
As for the indices of the New York Stock Exchange and the American Stock Exchange, they practically do not affect the FOREX market. Currency traders are not particularly interested in them, but it is necessary to know about their existence, at least in order not to be frightened at the sight of the abbreviations NYSE and AMEX.
Now, the third index we will look at today, along with the Dow Jones and the S&P is considered one of the main indicators of the U.S. stock market. This is the NASDAQ index, or "over-the-counter index".
Abbreviation NASDAQ stands for "National Association of Securities Dealers Automated Quotation", i.e. literally "National Association of Securities Dealers Automated Quotation". This frighteningly long name hides the world's first electronic stock exchange. It appeared in the United States in February 1971.
The point is that not all companies' shares were traded on traditional stock exchanges. There was also the so-called "off-exchange turnover". In order to organize this very turnover somehow, the following was created NASDAQ. Computer technologies by that time in America were already well developed, and therefore this exchange became electronic. And by the mid-90s of the last century, NASDAQ had surpassed the good old New York Stock Exchange in terms of trading volumes.
С самого начала своего существования биржа NASDAQ рассчитывает свой собственный индекс — NASDAQ Composite (although it is usually referred to simply as NASDAQ, "Nasdaq"). More than 5,000 companies are included in the index. Historically, a significant number of them are high-tech companies, including those involved in software and computer engineering, as well as biotechnology and telecommunications. Therefore, the index is particularly sensitive to the state of affairs in this particular sector of the economy.
Another peculiarity of this index is that foreign companies have a great weight in its composition. In general, shares of foreign companies are listed on other U.S. exchanges as well, but the leader in their number is the NASDAQ.