Market Indices
Benchmarks that track a basket of securities: the price-weighted Dow Jones Industrial Average (30 large companies), the market-cap-weighted S&P 500, the tech-heavy Nasdaq Composite, and the small-cap Russell 2000.
In a price-weighted index a high-priced stock moves the average more; in a cap-weighted index the largest companies dominate. Indices are also the underlying for index options, which settle in cash rather than shares.