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Stock Market

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Running head: STOCK MARKET 1
Stock Market
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STOCK MARKET 2
Stock Market
Stock is defined as a share of the ownership of a company. On the other hand, a share is
defined as a unit of ownership in a corporation. It is can also be a financial asset which provides
for an equal distribution in any profits. An exchange is a market where trading of commodities,
securities, derivatives as well as other financial instruments takes place. Exchanges can take
place in the NASDAQ and NYSE. These are similar in that they both offer a platform for
companies and allow brokers to participate. However, they are different in that NYSE is an
auction market while NASDAQ is a dealer’s market. NASDAQ focuses on volatile companies
that are growth oriented while NYSE houses well established companies (Devos,
Kittiakarasakun & Tse, 2014).
Stock market performance indicators help to predict the future of these stocks. These
tools are used to track the past performance of specific stock baskets. Some example of the stock
market indicators includes the DOW and S&P 500. The DOW mainly focuses on well
established companies. The S&P 500 (standard and poor’s 500) on the other hand is a
capitalization-weighted index. The S&P 500 is a strategic tool because it focuses on around 500
companies which have the largest market capitalization (Phillips, Shi & Yu, 2015). As such, this
tool provides a general idea of how a wide range of companies are doing. With this information,
an investor can make a well-informed decision. However, it is important to note that these cannot
be able to predict the future since they do not have magical powers. Matter of fact, they are just
used as benchmarks to gauge the performance of the market.
The sectors of the stock market are the financials, utilities, consumer discretionary,
consumer staples, energy, health care, industrials, technology and telecom. Some examples of

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Running head: STOCK MARKET 1 Stock Market Student’s Name Number Course Professor Date STOCK MARKET 2 Stock Market Stock is defined as a share of the ownership of a company. On the other hand, a share is defined as a unit of ownership in a corporation. It is can also be a financial asset which provides for an equal distribution in any profits. An exchange is a market where trading of commodities, securities, derivatives as well as other financial instruments takes place. Exchanges can take place in the NASDAQ and NYSE. These are similar in that they both offer a platform for companies and allow brokers to participate. However, they are different in that NYSE is an auction market while NASDAQ is a dealer’s market. NASDAQ focuses on volatile companies that are growth oriented while NYSE houses well established companies (Devos, Kittiakarasakun & Tse, 2014). Stock market performance indicators help to predict the future of these stocks. These tools are used to track the past performance of specific stock baskets. Some example of the stock market indicators includes the DOW and S&P 500. The DOW mainly focuses on well established companies. The S&P 500 (standard and poor’s 500) on the other hand is a capitalization-weighted index. The S&P 500 is a strategic tool because it focuses on around 500 companies which have the largest market capitalization (Phillips, Shi & Yu, 2015). As such, this tool provides a general idea of how a wide range of companies are doing. With t ...
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