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American Morning

Ask CNN: What's the Difference Between Dow Jones, Nasdaq and S&P Stocks?

Aired May 17, 2001 - 09:26   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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ANNOUNCER: CNN viewer Sue Krupenevich asks CNN the question: What's the difference between the Dow Jones, Nasdaq and S&P stocks?

JOHN METAXAS, CNN FINANCIAL NEWS CORRESPONDENT: Investors are used to following the Dow Jones industrials, the Nasdaq and the S&P 500 to determine the level of the stock market. But the three indices are very different.

The Nasdaq composite is a reflection of the more than 5, 000 stocks that trade over the electronic marketplace known as the Nasdaq. The movement of the index is dominated by the 100 largest stocks known as the Nasdaq 100, many of which are technology related companies.

The much older Dow Jones industrials is an average of 30 stocks, chosen by Dow Jones & Company, the publisher of "The Wall Street Journal," to reflect the stock market. The Dow stocks, mostly New York Stock Exchange listed issues, are much more rooted in the traditional economy, though the average does include such well-know tech names as IBM, Microsoft and Intel.

The S&P 500 compiled by Standard & Poor's is an index of 500 of the largest stocks in the market. Many market professionals use this index as the truest gauge of the stock market because it represents the widest range of industries in the U.S. economy. `

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