Dow Jones index ends June 23rd session with a gain of 0.64%.

Good day for the Dow Jones Industrial Average, which ended the day on Thursday, June 23 with gains of 0.64% to 30,677.36 points. The Dow Jones Industrial Average reached a high of 30,715.63 points and a low of 30,293.40 points. The trading range for the Dow Jones Industrial Average between its high and low (high low) for the day was 1.37%.

Looking at the data for the last seven days, the Dow Jones Industrial Average is up 0.03%; however, it is still down 9.44% from a year ago. The Dow Jones Industrial Average is 16.64% below its high for the current year (36,799.65 points) and 2.64% above its year-to-date low (29,888.78 points).

What is a stock market index and what is it used for?

A stock market index is an indicator that shows how the price of a given set of assets changes, by taking data from various companies or sectors in one part of the market.

These indicators are mainly used by the stock exchanges of different countries and each one of them can be integrated by firms with different specificities such as having a similar market capitalization or belonging to the same type of industry, in addition, there are some indexes that only consider a handful of shares to determine their value or others that consider hundreds of shares.

Stock indices serve as an indicator of stock market sentiment, business confidence, the health of the national and global economy, and the performance of a company’s stock and equity investments. Generally, if investors lack confidence, stock prices tend to fall.

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They also function to measure the performance of an asset manager and allow investors to compare return and risk; to measure the opportunities of a financial asset or to create portfolios.

These types of indicators began to be used at the end of the 19th century after the journalist Charles H. Dow observed closely how company shares tended to rise or fall together in price, so he created two indexes: one containing the 20 most important railroad companies (as it was the most important industry at the time), as well as 12 shares of other types of businesses.

For example, the US Nasdaq index is composed of the 100 largest technology-related companies such as Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), Facebook (FB), Alphabet (GOOG), Tesla (TSLA), Nvidia (NVDA), PayPal (PYPL), Comcast (CMCSA), Adobe (ADBE).

How are they calculated and how to read them?

Each stock market index has its own method of calculation, but the main factor is the market capitalization of each firm in the index. This is calculated by multiplying the day’s value of the bond on the corresponding stock exchange by the total number of shares in the market.

Firms listed on the stock exchange are required to submit a balance sheet of their composition. Such a report must be reported every three or six months, as appropriate.

Reading a stock index also involves paying attention to its changes over time. New indices always start with a fixed value based on the prices of the securities on their inception date, but not all follow this method. As a result, it can be misleading.

If one index grows 500 points in one day, while another only adds 20 points, it may appear that the first index outperformed. But, if the former started the day at 30,000 points and the latter at 300, it can be assumed that, in percentage terms, the gains for the latter were more remarkable.

These are the main stock market indexes

Among the main stock market indexes in the United States is the Dow Jones Industrial Average, better known as Dow Jones, of which 30 companies are part. Likewise, the S&P; 500, which includes 500 of the largest companies on the New York Stock Exchange. Finally, there is the Nasdaq 100, which includes 100 of the largest non-financial firms.

On the other hand, the most important indices in Europe are the Eurostoxx 50, which comprises the 50 most important companies in the Eurozone. On the other hand, the DAX 30, the main German index containing the most important companies of the Frankfurt Stock Exchange; the FTSE 100 of the London Stock Exchange; the CAC 40 of the Paris Stock Exchange; and the IBEX 35, of the Spanish stock exchange.

In Asia, the main stock market indexes are the Nikkei 225, made up of the 225 most important companies on the Tokyo Stock Exchange. Likewise, the SSE Composite Index is seen as the most solid in China, made up of the most relevant companies of the Shanghai Stock Exchange. The Hang Seung Index in Hong Kong and the KOSPI in South Korea are also worth mentioning.

In the Latin American region, there is the IPC, which contains the 35 most powerful companies on the Mexican Stock Exchange (BMV). At least a third of them are owned by magnate Carlos Slim.

Another is the Bovespa, made up of the 50 most important companies of the Sao Paulo stock exchange; the Merval of Argentina; the IPSA of Chile; the MSCI COLCAP of Colombia; the IBC of Caracas, made up of 6 Venezuelan companies.

Finally, there are other types of global stock market indexes such as the MSCI Latin America, which includes the 137 most important companies of Brazil, Chile, Colombia, Mexico and Peru.

Similarly, there is the MSCI World, which includes 1,600 companies from 23 developed countries; the MSCI Emerging Markets, made up of more than 800 companies from developing countries; and the S&P Global 100, made up of the 100 most powerful multinational firms from all over the planet.

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