Stock Market?

Question

i'm learning about the stock market in school, but im still kinda confused. What is Nasdaq and DownJones. I think that is what they are called. I thought you invested in companies, if that is correct, then what companies are those two i just mentioned? thanks!

Answer 1

Interesting question from a school kid.
A stock market provides a facility to buy and sell shares and stocks of companies. It has members known as brokers, dealers or traders who transact business for investors and outsiders. They charge a commission for this and this is known as brokerage. In fact, brokers would get buy-sell orders from many of their clients and they would just get them matched. All business in stock exchanges is done under rules and regulations framed under the relevant law.
NASDAQ is the stock exchange where shares of technology related companies are listed and hence bought and sold. The name also refers to an index which indicates ups and downs in the market for technology firms listed on the NASDAQ.
Dow Jones is not a stock exchange. It is again an index which reflects variations in the overall market condition viz., ups and downs as a whole or on the average. It is constructed with thirty scrips of well known companies and the assumption is that these thirty firms reflect the market as a whole. In other words, they are representative of the market and provide a measure with some past year as a base year. All these indexes are expressed in percentage terms and show ups and downs with reference to the base year used.

Answer 2

NASDAQ was originially the National Association of Securities Dealers Automated Quotations system, but it's essentially the stock exchange for smaller companies, as is the AMEX exchange.

The Dow Jones Industrial Average (DJIA) that is always quoted is the average of the largest 30 stocks on the New York Stock Exchange, also called the Big Board. It was originally only 12 stocks (all but one of which no longer exist; that one is General Electric). The S&P 500 is also a subset of the NYSE. The stocks that are actually in the DJIA changes as company sizes change, but here are the current 30:

3M, Alcoa, Altria (used to be Philip Morris), American Express, AIG, AT&T, Boeing, Caterpillar, Citigroup, Coca-Cola,. du Pont, Exxon Mobile, General Electric, General Motors, Hewlett-Packard, Home Depot, Honeywell, Intel, IBM, Johnson & Johnson, JP Morgan Chase, McDonald's, Merck, Microsoft, Pfizer, Proctor & Gamble, United Technologies, Verizon, Walmart, Walt Disney

Answer 3

Nasdaq and DowJones are Indexes, and Index is like a thermometer that tells you how you are doing, in this case Nasdaq and Dow Jones tell you how certain markets are doing. Nasdaq is all the internet related companies ( Microsoft, IBM etc) , Down Jones all of the industries ( companies that work with gold, oil, etc)

There is another Index called Standard and Poor's 500, this "thermometer" tells you how the market is doing in general, it takes 500 mixed companies from the Nasdaq and from the Dow to measure the direction the market is taking. I hope I was clear enough!.

Answer 4

oh my gosh! nasdaq is a stock exchange and index. dow jones is an average of 30 companies, normally blue-chip companies and large cap.