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User Name Thread Name Subject Posted
GUEST,Jack the Sailor BS: Dumb Q: What are stock market 'points'? (25) RE: BS: Dumb Q: What are stock market 'points'? 29 Sep 08

There are several major indexes. The Dow Jones is the most famous. It represents the additions of the stock prices of 30 large selected companies.

In the case of the Dow, If the Price of IBM goes up a dollar and every other shock remains the same then the Dow goes up one "point".

Today the Dow fell 700 points. that means that the share prices of the 30 big companies among them dropper 700 points.

The above is a very poor way to judge the over all health of the market.

Other indexes weight their averages factoring in the size of the companies and their level of capitalization. In that case a point does not as closely represent a dollar. In any case the percent change is the most useful indicator. Saying the NasDaq went down 5 per cent is more useful than saying it went down a hundred points.

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