The S&P 500:   The Standard & Poor's 500 Index, commonly known as the S&P 500, is an index with 500 of the top companies in the U.S. Stocks chosen by market capitalization. The S&P 500 Index is weighted by market cap. The constituent committee also considers other factors, including liquidity, public float, sector classification, financial viability, and trading history. The S&P 500 Index represents approximately 80% of the total value of the U.S. stock market and provides a gauge of the whole U.S. market. When the total market value of all 500 companies in the S&P 500 drops by 10%, the value of the index also drops by 10%. Many of these stocks overlap with other indexes and compiled lists like the Nifty Fifty.

The Dow Jones Industrial Average:   The Dow Jones Industrial Average (DJIA) includes the stocks of 30 of the largest and most influential companies in the United States. The index is known for listing the U.S. market's best blue-chip companies with regularly consistent dividends. The DJIA is a price-weighted index, once computed by totalling the per-share price of the stock of each company in the index and dividing this sum by the number of companies.

Stock splits, spin-offs, and other events have resulted in changes in the divisor. The DJIA represents about a quarter of the value of the U.S. stock market. Although the DJIA is not a snapshot of the broad market, it reflects the blue-chip, dividend-value market.

The NASDAQ:   A U.S.-based stock market exchange and the second-largest stock exchange by market cap globally. NASDAQ stands for National Association of Security Dealers Automated Quotations and is owned and operated by NASDAQ Inc.

NASDAQ Inc. is the parent organization to the NASDAQ stock exchange. NASDAQ Inc. also operates exchanges throughout Europe and owns several business lines, including SMART (market surveillance technology services) and GlobeNewswire (press release distribution).

• The NASDAQ is the second-largest stock market exchange globally by market cap.
• Many technology stocks such as Apple and Microsoft trade on the NASDAQ.
• The NASDAQ makes money through fees charged on its business lines: corporate services, info services, market services, and technology services.

The Russell 2000 Index:   A stock market index that measures the performance of the 2,000 smaller companies included in the Russell 3000 Index. The Russell 2000 is managed by London's FTSE Russell Group, widely regarded as a bellwether of the U.S. economy because of its focus on smaller companies in the U.S. market.

Key Takeaways

• The Russell 2000 index is a market index composed of 2,000 small-cap companies.
• The index was launched in 1984 by the Frank Russell Company and is now managed by FTSE Russell.
• The index is frequently used as a benchmark for measuring the performance of small-cap mutual funds.
• Many investors see the index's breadth as giving it an edge over narrower indexes of small-cap stocks.
• Investors can replicate the returns of the Russell 2000 Index by investing in a fund that tracks the index.
• The Russell 2000 Index was launched in 1984 by the Frank Russell Company. It is a U.S. index managed by FTSE Russell, a subsidiary of the London Stock Exchange (LSE) Group. The index is composed of about 2,000 small-cap companies.1

Russell 3000 Total Return Index: This index represents 3000 large U.S. companies, ranked by market capitalization. It represents approximately 98% of the U.S. equity market. This index includes the effects of reinvested.