Standard and Poor is a financial organization that has been cataloging and monitoring big finance for a very long time. To help investors get a better grip on what the entire New York Stock Exchange is up to, Standard and Poor devised the S&P 500 to act as a summary of daily market activity.
What Is The S&P 500?
The S&P 500 is a collection of the 500 companies that have issued the most commonly held stocks that the NYSE has to offer. The S&P 500 generates various indicators based on the activity with these 500 companies to give a snapshot look into how the entire NYSE is acting and to give an idea as to how much capital the market is generating. Investors will often add up the value of all of the shares owned throughout all 500 companies over a period of time and use that number to try and predict what will happen with those values in the future.
S&P 500 Criteria
To be a member of the S&P 500, a company must have at least 50 percent of its shares available as stock on the NYSE, have a total share value of at least $4 billion, and be a U.S. company. The S&P 500 breaks its numbers down into market segments that include industries such as energy, financial, and utilities to help give more focused numbers to investors interested in those specific industries.
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