S&P is short for Standard & Poor’s. This represents an index of 500 stocks chosen for many of their characteristics, with market size, liquidity and industry grouping being the most important. The main reason the S&P was created is that it serves as an indicator of US stocks, but it also reflects the risk/return characteristics of the large-cap universe. It is actually a market value weighted index. This means that the weight of each stock in the index is proportional to its market value.
Companies included in the index go through a tough selection by the S&P Index Committee. This team is made up of a team of analysts and economists from Standard & Poor’s.
Each corporation is assigned a ticker symbol. This is basically a memory aid used to uniquely identify the publicly traded shares of a corporation on a particular stock market. For example, the letters KO symbolize Coca Cola Company. Exxon Mobile Company is symbolized by the characters XOM, McDonalds by MCD, etc. This not only makes it easier to find while searching the index, but also easier to remember.
Then, there’s the SEC filing, a financial statement or other formal document filed with the US Securities and Exchange Commission (SEC). These papers are generally necessary for public companies, in order to eliminate any speculation. That’s why they’re free for anyone to view in the SEC’s EDGAR database. A very good idea, because you have at your disposal general information, such as your business and postal address, your field of activity, your year-end closing, and many other features that can be useful when you plan to become a future client.
Last but not least, every company has a Global Industry Classification Standard (GICS). This means your industry sector, as defined by your principal business activity. Beware of sub-industries, because the type of products they produce divides some of the sectors. For example, Financial Companies are divided into Banks, Diversified Financial Companies, Insurance, and Real Estate.
According to the price list, the Washington Post occupies the first position with 605.50, followed by Google with 486.53 and CME Group Inc, with 342.11. Other companies included in this important index include Apple Inc., Chevron Corp., Amazon Corp., Colgate-Palmolive, PepsiCo Inc., NIKE Inc., Philip Morris Intl., Hewlett-Packard, Harley-Davidson, and many other well-known brands.