Speaking about Forex currency market, it is almost impossible not to mention stock price indexes. There are a few types of such indexes and all of them will be described below in this article. And now we will talk what indexes are in order to have a clear idea. An index is an average number that represents the performance of a group of stocks.
S&P 500 Index
S&P is an abbreviation of Standard and Poor’s Stock Price Index. S&P is a weighted mean value of stock pricing. Provided that, this stocks belong to the biggest industrial companies the average number of which is around 500.
NYSE Composite Index
This type of stock price indexes is a little bit “wider” than other stock price indexes in terms that it considers and takes into account wider range of stock pricing/equity price.
To calculate NYSE Composite Index, stock pricing that is registered in New York should be used. As for American Stock Exchange, they also have similar stock price index. Moreover, this index has a tendency to evaluate the price of all security papers which pass through this Stock Exchange.
Wilshire 5000 and Russel 3000
These two indexes are perhaps the most wide-spread stock pricing indexes in the majority of different U.S companies.
Because of this reason Wilshire 5000 and Russel 3000 are regularly published in all major newspapers and other financial papers.
The main advantage of these indexes is the following – they fix a condition of all shares/stocks starting from company’s stocks and finishing with stocks that “float” in the street market/ off-the-board-market.
This is one more reason that proves that Wilshire 5000 and Russel 3000 demonstrate the most precise condition of the American financial market.
Dow Jones Industrial Average
In most cases, you can hear about this type of index only when there are some serious changes on a foreign exchange market.
The first point that should be noticed is that Dow Jones Index includes figures of only 30 stock pricing.
The working system of this particular index is pretty simple – it calculates an average stock pricing but comparing with all the above-mentioned indexes types, this one is not so “sophisticated”.
Despite this fact, it is considered that Dow Jones Index is the only index that analyzes the situation on a market neutrally.