US indexes Dow Jones, S&P 500, NASDAQ 100 - difference
What is the difference between US indexes Dow Jones, S&P 500, NASDAQ 100 ? Why there are 3 indexes with different values ?
The biggest difference between Dow Jones, S&P 500 and NASDAQ 100 is the number of included companies and the structure of included companies.
Dow Jones Industrial Average - abbreviated DJIA, is price-weighted and probably the best known US stock market index. It consists of 30 large US publicly traded "blue-chip" companies. DJIA is considered as one of the indicators of US economy. It covers industries like financial services, IT, food industry, pharmaceutical industry, petroleum industry, retailing etc. The companies are traded on NYSE or Nasdaq stock market.
S&P 500 - is free-float market capitalization-weighted stock market index, that consists of 500 large publicly traded companies, listed on US stock exchanges. It also covers a wide range of industries.
NASDAQ 100 - is modified market capitalization-weighted index, that includes the 100 largest non-financial companies listed on the Nasdaq stock market.
All the companies that are included in Dow Jones Industrial Average are most probably the "blue chip" top companies. NASDAQ 100 includes blue chip top companies as well, but there are also many other large and reputable companies like Adobe, Amazon, eBay, Facebook, Qualcomm etc.