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What is the 'Standard & Poor's 500 Index - S&P 500'

Updated: Oct 29, 2018

The Standard & Poor's 500 Index (S&P 500) is an index of 500 stocks seen as a leading indicator of U.S. equities and a reflection of the performance of the large cap universe, made up of companies selected by economists. The S&P 500 is a market value weighted index and one of the common benchmarks for the U.S.stock market;other S&P indexes include small cap companies with market capitalization between $300 million and $2 billion, and an index of mid cap companies. Investment products based on the S&P 500 include index funds and exchange-traded funds a re available to investors.

BREAKING DOWN 'Standard & Poor's 500 Index - S&P 500'

The S&P 500 is widely regarded as the most accurate gauge of the performance of large-cap American equities.While the S&P 500 focuses on the large-cap sector of the market; it is considered representative of the market because it includes a significant portion of the total value of the market. The 500 companies included in the S&P 500 are selected by the S&P Index Committee,a team of analysts and economists at Standard & Poor's. These experts consider various factors when determining the 500 stocks that are included in the index,including market size, liquidity and industry grouping.

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