Standard & Poor's 500 Index

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Related to Standard & Poor's 500 Index: S&P 500

Standard & Poor's 500 Index

A stock market index tracking 500 companies in various industries with a large amount of market capitalization. It is a capitalization-weighted index, meaning that stocks with higher market caps affect the average more. The companies included on the S&P 500 are decided by committee and are updated periodically. It also scales its averages to account for stock splits and other changes in the companies tracked. Next to the Dow Jones Industrial Average, it is considered one of the premier securities indices in the United States. Some exchange-traded funds, notably SPDRs, track the S&P 500.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Standard & Poor's 500 Index (S&P 500).

The benchmark Standard & Poor's 500 Index, widely referred to as the S&P 500, tracks the performance of 500 widely held large-cap US stocks in the industrial, transportation, utility, and financial sectors.

In calculating the changing value of this capitalization-weighted index, also called a market value index, stocks with the greatest number of floating shares trading at the highest share prices are weighted more heavily than stocks with lower market value.

This can mean that a relatively few stocks have a major impact on the movement of the index at any point in time. The stocks included in the index, their relative weightings, and the number of stocks from each of the sectors vary from time to time, at S&P's discretion.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
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