Coming to terms: Nasdaq, S&P 500
The Nasdaq is the largest electronic stock market in America.
Q: What does “Nasdaq” refer to?
A: Created in 1971 as the National Association of Securities Dealers Automated Quotations, it’s now the largest electronic stock market in America, where shares of about 3,200 companies are traded.
It boasts more companies and, on average, more trades per day than any other U.S. market. Learn more at nasdaq.com.
Q: What’s the S&P 500?
A: It’s an index of 500 of America’s biggest companies, selected by the folks at Standard & Poor’s.
Though the U.S. stock market encompasses thousands of companies, these 500 together make up more than 75 percent of the market’s total value.
It’s one of the most often-cited stock indexes, along with the Dow Jones industrial average and the Nasdaq composite.
The companies mostly have market capitalizations of at least $4 billion.
You can invest in the S&P 500 easily via an index fund such as the low-cost Vanguard 500 Index.