Major Stock Exchange Introduction

The US stock market is the largest capital market in the world. The total market capitalization of listed companies and trading volume are the highest among all stock equity markets all over the world. It also contains the most varieties of corporate types of listed companies.

Leading enterprises with the highest market value and trade volume like CitiGroup, Intel, Microsoft and Coca-Cola, choose to list on the US stock market because of the strong capital raising power of US stock market. With a standard cash custodian account, investors may trade blue-chip shares and stocks of many other leading technology companies in the US market. Phillip Securities, with the newly launched on-line US stock trading service, provides you an opportunity to enlarge your investment horizon in the world biggest stock market.

Generally speaking, large enterprises tend to be listed on the New York Stock Exchange or the NASDAQ Stock Market.

The New York Stock Exchange

The New York Stock Exchange (NYSE) has established for more than 200 years, it is the largest US exchange with the highest reputation. Until 2007, more than 2300 enterprises were listed on NYSE, over 15 trillions total global market capitalization.

Since 2000, NYSE has been processing mergers and acquisitions actively. In 2005, it acquired another electronic exchange, Archipelago. In April 2007, NYSE announced merging with Euronext and formed a new holding company named NYSE Euronext. This merging successfully expanded its territory to Europe, as well as the expansion of the products from the equities to derivatives. In June 2008, NYSE completed the acquisition of America stock exchange (Amex).

The listing requirements of NYSE are stringent. The enterprises which have no profitable performance records are not allowed to enter the New York Stock Exchange. Most of the 500 historic largest enterprises, including mostly listed on NYSE. They are included General Electric, Exxon Mobil, Wal-Mart, Citigroup and Johnson & Johnson are well known for investors.

Major Index Introduction

There are many indices related to stock market, their importance should not be overlooked. Especially, the Dow Jones Industrial Average Index, Standard & Poor’s 500 Index and the NASDAQ Composite Index etc, these 3 indices have already deemed by the market, investors and even regulators as high quality and reliable indicators. For the retail investors, it is not only to recognize these 3 majors indices, fully understanding to the indices is needed. The first procedure of mastering the increasingly sophisticated stock market is to understand the stock market indices.

Dow Jones Industrial Average (DJIA)

The Dow Jones Industrial Average or DJIA is a price-weighted, the oldest and certainly the most popular stock-market indicator series, formed in 1884. Although it is a price-weighted average of the 30 NYSE components and only one forth of market capitalization, DJIA is a good indicator with strong history since the large enterprises are included in DJIA. Until the end of 1999, Microsoft and Intel are included in the components, it is indirect reflected that the management of DJIA accept the importance of science and technology stocks.

The NASDAQ Composite

NASDAQ stock market has its own index, to reflect and measure the market performance. NASDAQ composite index includes thousands of companies listed in NASDAQ market. The index is associated with all listed companies. Hence, it is truly a weighted index.

NASDAQ 100

The NASDAQ-100 is a stock market index of 100 of the largest domestic and international non-financial companies listed on the NASDAQ. It is a modified market value-weighted index. The companies' weights in the index are based on their market capitalization, with certain rules capping the influence of the largest components. It does not contain financial companies, and includes companies incorporated outside the United States. Both of those factors differentiate it from the Dow Jones Industrial Average, and the exclusion of financial companies distinguishes it from the S&P 500 Index.

Standard & Poor’s 500

Standard & Poor’s 500 is referential since it is bases on 500 large companies involving various industries, The fund management companies in most regions of US and other part of the world also regards S&P 500 as an vital reference index. In fact, the first index future contracts used S&P 500 as the underlying assets in early 80s.

Russell 2000

The Russell 2000 Index is a small-cap stock market index.

The Russell 2000 is by far the most common benchmark for mutual funds that identify themselves as "small-cap", while the S&P 500 Index is used primarily for large capitalization stocks. It is the most widely quoted measure of the overall performance of the small-cap to mid-cap company shares. The index represents approximately 10% of the total market capitalization of the Russell 3000 Index. The average market capitalization for a company in the index is around $530 million. The ticker symbol on most systems is ^RUT.

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