Stock market indexes historyThe US stock market indexes history starts with the Dow and continues to this day. There are basically 4 major stock indexes in the US, NASDAQ, Dow Jones, S&P 500, and the Russell 3000. Dow Jones The Dow Jones was first created in 1896 by Charels Dow. It was the second index created after the Dow Jones Transportation Average. It consists of the 30 largest stocks in the US at any given time. When the Dow opened its doors in 1896 the index had a price of $40.94, today it is trading for $10,545.41 giving us a firm understanding of just how powerful the market can be in the long term. Despite several setbacks the largest of which was the great depression which showed an 89.19% drop in the Dow, it remains one of the biggest indexes around. The Dow can be traded through the ETF DIA. Below is a Dow Jones closing history graph taken from the time it was created to today.
S&P 500 The S&P 500 was created in 1957 and consists of the 500 largest companies in the US, updated regularly by a committee. This index is also the largest and most watched out of all of the indexes in the US stock market. If you have ever heard that the average stock market return is 10% that number was taken from the S&P. The S&P can be traded through the ETF SPY. Here is a graph of the S&P historical returns.
NASDAQ The NASDAQ was formed on February 8, 1971 by the National Association of Securities Dealers. It was the first electronic based market in the world. The exchange was officially released to list smaller companies that did not meet the requirements of other exchanges. In 1994 the NASDAQ surpassed the NYSE in the number of shares traded. It then merged with the American Stock Exchange in 1998 creating the NASDQ-AMEX. The NASDAQ can be traded through the ETF QQQQ. Below is the NASDAQ chart history.
Russell 3000 The Russell 3000 consists of the Russell 1000 (1000 largest companies) and the Russell 2000 Index(2000 second largest companies). It was created in 1984 to track the performance of the largest 3000 companies in the US. Like the S&P and Dow the list is regularly updated. But unlike the S&P and Dow the Russell sets strict rules on which stocks are accepted and it is not open to discussion. The options on the Russell can be traded through the symbol RUT (although your broker may be different). Below is the chart for the Russell 3000.
The stock market indexes history is constantly evolving, but these are the ones which have taken the lead and have kept it throughout time. Return From Stock Market Indexes History to Stock Market Basics Other Articles Stock Market Exchanges and Indexes FAQ |
