S&P 500
The S&P 500 is made up of roughly 500 large U.S.-listed companies, weighted by float-adjusted market cap. It covers about 80% of total U.S. stock market value and is the most widely used gauge of the U.S. large-cap market.
How to read it
Constituents are not simply picked by market-cap rank; a committee decides. A company must be listed in the U.S., meet a market-cap threshold, be sufficiently liquid and have positive total earnings over the most recent four quarters.
Because the index is cap-weighted, the ten largest companies (mostly tech giants) make up more than 30% of its weight, and they largely determine which way the index moves.
Constituents are adjusted every quarter. Companies that are added see passive buying from index funds.
Common pitfalls
- The index actually holds about 503 stocks, because a few companies have two share classes included at the same time (Alphabet's GOOGL and GOOG, for example).
On FinDog
FinDog covers every S&P 500 constituent. The heat map on the Market Overview shows the day's move for all constituents, grouped by sector and sized by market cap.
Open Market Overview →Related terms
- Market CapitalizationMarket capitalization is the share price multiplied by total shares outstanding: the price the market puts on all of a company's equity. To compare the size of companies, look at market cap, not share price.
- Market BreadthMarket breadth measures how many stocks are taking part in a rally or a decline. Common indicators include the advance/decline ratio, the share of stocks trading above their 50-day moving average, and the number of stocks hitting new 52-week highs and lows.