Question

talk about the following stock market indices

a) Dow Jones industrial average

b) Nasdaq Composite

c) CAC 40

Answer 1

Thank u, please like this answer and support us please,

and please dont give us any hate, this is the best answer for your question,

A:

The Dow Jones Industrial Average (DJIA), Dow Jones, or simply the Dow (/ˈdaʊ/), is a stock market index that measures the stock performance of 30 large companies listed on stock exchanges in the United States. Although it is one of the most commonly followed equity indices, many consider the Dow to be an inadequate representation of the overall U.S. stock market compared to broader market indices such as the S&P 500 Index or Russell 3000 because it only includes 30 large cap companies, is not weighted by market capitalization, and does not use a weighted arithmetic mean.^[4][5][6][7]

The value of the index is the sum of the price of one share of stock for each component company divided by a factor which changes whenever one of the component stocks has a stock split or stock dividend, so as to generate a consistent value for the index. Since the divisor is currently around 0.1458, the value of the index is 6.859 times larger than the sum of the component prices.

It is the second-oldest U.S. market index after the Dow Jones Transportation Average, created by The Wall Street Journal editor and Dow Jones & Company co-founder Charles Dow. It is the best known of the Dow Averages, of which the first (non-industrial) was originally published on February 16, 1885. The averages are named after Dow and one of his business associates, statistician Edward Jones. The industrial average was first calculated on May 26, 1896.^[2]

The Industrial portion of the name is largely historical, as many of the modern 30 components have little or nothing to do with traditional heavy industry. The index is maintained by S&P Dow Jones Indices, a joint venture majority-owned by S&P Global and its components are selected by a committee. The ten components of the index with the highest dividend yields are referred to as the Dogs of the Dow. Although the Dow is compiled to gauge the performance of the industrial sector within the American economy, the index's performance continues to be influenced by not only corporate and economic reports, but also by domestic and foreign political events such as war and terrorism, as well as by natural disasters that could potentially lead to economic harm.

In 1884, Charles Dow composed his first stock average, which contained nine railroads and two industrial companies that appeared in the Customer's Afternoon Letter, a daily two-page financial news bulletin which was the precursor to The Wall Street Journal. On January 2, 1886, the number of stocks represented in what is now the Dow Jones Transportation Average dropped from 14 to 12, as the Central Pacific Railroad and Central Railroad of New Jersey were removed. Though comprising the same number of stocks, this index contained only one of the original twelve industrials that would eventually form Dow's most famous index.^[34]

Initial components[edit]

Dow calculated his first average purely of industrial stocks on May 26, 1896, creating what is now known as the Dow Jones Industrial Average. None of the original 12 industrials still remain part of the index.^[35]

• American Cotton Oil Company, a predecessor company to Hellmann's and Best Foods, now part of Unilever.^[36]
• American Sugar Refining Company, became Domino Sugar in 1900, now Domino Foods, Inc.^[36]
• American Tobacco Company, broken up in a 1911 antitrust action.
• Chicago Gas Company, bought by Peoples Gas Light in 1897, now an operating subsidiary of Integrys Energy Group.^[36]
• Distilling & Cattle Feeding Company, now Millennium Chemicals, formerly a division of LyondellBasell.^[37][36]
• General Electric, still in operation, removed from the Dow Jones Industrial Average in 2018.^[36]
• Laclede Gas Company, still in operation as Spire Inc, removed from the Dow Jones Industrial Average in 1899.^[36]
• National Lead Company, now NL Industries, removed from the Dow Jones Industrial Average in 1916.^[36]
• North American Company, an electric utility holding company, broken up by the U.S. Securities and Exchange Commission (SEC) in 1946.^[36]
• Tennessee Coal, Iron and Railroad Company in Birmingham, Alabama, bought by U.S. Steel in 1907; U.S. Steel was removed from the Dow Jones Industrial Average in 1991.^[36]
• United States Leather Company, dissolved in 1952.^[36]
• United States Rubber Company, changed its name to Uniroyal in 1961, merged with private Goodrich Corporation in 1986, tire business bought by Michelin in 1990.^[36] (The remainder of Goodrich remained independent several more years but was acquired by United Technologies in 2012 and became a part of UTC Aerospace Systems, now Collins Aerospace, a Raytheon Technologies subsidiary.)

Early years[edit]

When it was first published in the mid-1880s, the index stood at a level of 62.76. It reached a peak of 78.38 during the summer of 1890, but ended up hitting its all-time low of 28.48 in the summer of 1896 during the Panic of 1896. Many of the biggest percentage price moves in the Dow occurred early in its history, as the nascent industrial economy matured. In the 1900s, the Dow halted its momentum as it worked its way through two financial crises: the Panic of 1901 and the Panic of 1907. The Dow remained stuck in a range between 53 and 103 points until late 1914. The negativity surrounding the 1906 San Francisco earthquake did little to improve the economic climate; the index broke 100 for the first time in 1906.^[38]

At the start of the 1910s, the Panic of 1910–1911 stifled economic growth. On July 30, 1914, as the average stood at a level of 71.42, a decision was made to close down the New York Stock Exchange, and suspend trading for a span of four and a half months. Some historians believe the exchange was closed because of a concern that markets would plunge as a result of panic over the onset of World War I. An alternative explanation is that the United States Secretary of the Treasury, William Gibbs McAdoo, closed the exchange to conserve the U.S. gold stock in order to launch the Federal Reserve System later that year, with enough gold to keep the United States on par with the gold standard. When the markets reopened on December 12, 1914, the index closed at 74.56, a gain of 4.4%. This is frequently reported as a large drop, due to using a later redefinition. Reports from the time say that the day was positive.^[39] Following World War I, the United States experienced another economic downturn, the Post–World War I recession. The Dow's performance remained unchanged from the closing value of the previous decade, adding only 8.26%, from 99.05 points at the beginning of 1910, to a level of 107.23 points at the end of 1919.^[40]

The Dow experienced a long bull run from 1920 to late 1929 when it rose from 73 to 381 points.^[41] In 1928, the components of the Dow were increased to 30 stocks near the economic height of that decade, which was nicknamed the Roaring Twenties. This period downplayed the influence of the Depression of 1920–21 and certain international conflicts such as the Polish–Soviet War, the Irish Civil War, the Turkish War of Independence and the initial phase of the Chinese Civil War. After a peak of 381.17 on September 3, 1929, the bottom of the 1929 crash came just 2 months later on November 13, 1929 at 195.35 intraday, closing slightly higher at 198.69.^[42] The Wall Street Crash of 1929 and the ensuing Great Depression over the next several years returned the average to its starting point, almost 90% below its peak. Overall for the 1920s decade, the Dow still ended with a healthy 131.7% gain, from 107.23 to 248.48 points at the end of 1929.^[41] In inflation-adjusted numbers, the high of 381.17 on September 3, 1929 was not surpassed until 1954.

Marked by global instability and the Great Depression, the 1930s contended with several consequential European and Asian outbreaks of war, leading up to catastrophic World War II in 1939. Other conflicts during the decade which affected the stock market included the 1936–1939 Spanish Civil War, the 1935–1936 Second Italo-Abyssinian War, the Soviet-Japanese Border War of 1939, and the Second Sino-Japanese War of 1937. The United States experienced the Recession of 1937–1938, which temporarily brought economic recovery to a halt. The largest one-day percentage gain in the index happened in the depths of the 1930s bear market on March 15, 1933, when the Dow gained 15.34% to close at 62.10. However, as a whole throughout the Great Depression, the Dow posted some of its worst performances, for a negative return during most of the 1930s for new and old stock market investors. For the decade, the Dow Jones average was down from 248.48 points at the beginning of 1930, to a stable level of 150.24 points at the end of 1939, a loss of about 40%.^[43]

1940s[edit]

Post-war reconstruction during the 1940s, along with renewed optimism of peace and prosperity, brought about a 39% surge in the Dow from around the 148 level to 206. The strength in the Dow occurred despite the Recession of 1949 and various global conflicts.

1950s[edit]

During the 1950s, the Korean War and the Cold War did not stop the Dow's climb higher. A 200% increase in the average from a level of 206 to 616 ensued over the course of that decade.

1960s[edit]

The Dow began to stall during the 1960s but still managed a respectable 30% gain from the 616 level to 800.

1970s[edit]

The 1970s marked a time of economic uncertainty and troubled relations between the U.S. and certain Middle-Eastern countries. The 1970s energy crisis was a prelude to a disastrous economic climate along with stagflation, the combination of high unemployment and high inflation. However, on November 14, 1972, the average closed at 1,003.16, above the 1,000 mark for the first time, during a brief relief rally in the midst of a lengthy bear market.^[38] Between January 1973 and December 1974, the average lost 48% of its value in what became known as the 1973–1974 stock market crash, closing at 577.60 on December 4, 1974. In 1976, the index reached 1,000 several times and it closed the year at 1,004.75. Although the Vietnam War ended in 1975, new tensions arose towards Iran surrounding the Iranian Revolution in 1979. Performance-wise for the 1970s, the index remained virtually flat, rising less than 5% from about the 800 level to 838.

B:

The NASDAQ Composite (ticker symbol ^IXIC)^[1] is a stock market index of the common stocks and similar securities (e.g. ADRs, tracking stocks, limited partnership interests) listed on the Nasdaq stock market. Along with the Dow Jones Industrial Average and S&P 500 it is one of the three most-followed indices in US stock markets. The composition of the NASDAQ Composite is heavily weighted towards information technology companies. The NASDAQ-100, whose components are a subset of the NASDAQ Composite's, accounts for over 90% of the NASDAQ Composite's movement, and there are many ETFs tracking its performance. The composite itself is calculated by taking the sum of the products of closing price and index share(capitalization-weighted) of all of the over 2500 securities in the index. The sum is then divided by a divisor which just serves to reduce the order of magnitude of the result.^[2]

The index was launched in 1971, with a starting value of 100. Over the years, the index has soared tremendously despite multiple periods of decline.

Dot-com boom and bust[edit]

On July 17, 1995, the index closed above the 1,000 mark for the first time. It made steady gains in the following years to reach 2,000 points by 1998, then began to accelerate significantly. This process mushroomed in late 1999. The index closed that year at 4,069.31 points. On March 10, 2000, the index finally peaked at an intra-day high of 5,132.52,^[3] and closed at an all-time high of 5,048.62.

The NASDAQ Composite index spiked in the late 1990s and then fell sharply as a result of the dot-com bubble.

On March 10, 2000, the NASDAQ Composite peaked at 5,132.52, but fell to 3,227 by April 17,^[4] and in the following 30 months fell 78% from its peak.^[5]

The decline from this peak signalled the beginning of the dot-com bubble burst. There were multiple things contributing to this Dot-com boom and bust. Some optimists thought the internet and World Wide Web would be more significant to business than any kind of Industrial Revolution in the past, possibly enabling us to achieve a Technological Singularity. More pessimistic types were concerned that business would require massive technology replacement to achieve Y2K compatibility.

The index declined to half its value within a year, and finally hit the bottom of the bear market trend on October 10, 2002, with an intra-day low of 1,108.49. While the index gradually recovered since then, it did not trade for more than half of its peak value until May 2007. The 2000s (decade) brought a mix of pessimistic news stemming from the Early 2000s recession, the September 11 attacks and the impending Afghan War along with the 2003 invasion of Iraq.

Financial crisis[edit]

The index opened the fourth quarter of 2007 with new 80-month highs, closing above the 2,800 point mark on October 9, 2007, and reaching an intra-day level of 2,861.51 on October 31, 2007, the highest point reached on the index since January 24, 2001.

High energy prices and the possibility of recession dropped the NASDAQ into a bear market in early 2008, which was recognized on February 6 when the NASDAQ closed below the 2,300 level, about 20% below the recent highs. Furthermore, the failure of Lehman Brothers in September brought world financial markets into turmoil. The NASDAQ was no exception, experiencing record levels of market volatility. On September 29, 2008, the NASDAQ dropped nearly 200 points, the most since the tech bubble burst, losing 9.14% (third largest in history) to fall beneath the 2,000 level. Conversely, on October 13, 2008, the NASDAQ recorded a gain of nearly 200 points (more than 11%). On March 9, 2009, the composite hit a six-year intra-day low of 1,265.52 before recovering under the influence of Federal Reserve quantitative easing (QE).

2010s bull market[edit]

Amid hope that the Great Recession, the United States housing bubble and the Global financial crisis of 2008–2009 were easing and possibly coming to an end, the NASDAQ established a volatile base from which the index would finally surpass the 3,000 mark, and the initial crash low of mid-2000 (3,042.66), for the first time since the end of the 20th century. This first occurred intra-day on February 29, 2012, before further volatile pullbacks. Later in 2012, the index managed a yearly close above 3,000 for only the second time in its history, with a total of 3,019.51 points.

With the extension of relatively low tax rates for most incomes, the index jumped to begin 2013 with only minor pullbacks. On November 26, 2013, the index made its first close above 4,000 since September 7, 2000. Although it still stood almost 20% below its all-time highs, the index did set a new record annual close of 4,176.59 on December 31, 2013. On March 2, 2015, the NASDAQ closed above 5,000 for the first time since March 9, 2000.

On April 23, 2015, the NASDAQ finally broke through the record of 15 years earlier and set a new high for a daily close, though it was still just short of the all-time intraday high set in 2000.^[6] After its first significant correction (greater than 10%) in about four years, the index roared back above 5,000 with a triple-digit gain on October 23, 2015. Two years later, the Nasdaq crossed 7,000 intraday, which was within reach of the inflation-adjusted high set back on March 10, 2000. Although Nasdaq flirted with the "unthinkable milestone" on January 16, 2018, the COMP closed above it the next day for the first time since the end of the Dot-com boom.^[7][8] Later that same year, NASDAQ plunged more than 20% below its high from August 29th, thus confirming bear market status on a closing-basis. The following year, NASDAQ rallied more than 20% from its trough on December 24, 2018, though it remains below last year's high, resulting in debates as to whether the index has left bear market territory or remains in there.^[9]

^C:

The CAC 40 (French: CAC quarante [kak kaʁɑ̃t]) (Cotation Assistée en Continu) is a benchmark French stock market index. The index represents a capitalization-weighted measure of the 40 most significant stocks among the 100 largest market caps on the Euronext Paris (formerly the Paris Bourse). It is one of the main national indices of the pan-European stock exchange group Euronext alongside Brussels' BEL20, Lisbon's PSI-20 and Amsterdam's AEX.

The CAC 40 takes its name from the Paris Bourse's early automation system Cotation Assistée en Continu (Continuous Assisted Quotation). Its base value of 1,000 was set on 31 December 1987, equivalent to a market capitalisation of 370,437,433,957.70 French francs.^[2] In common with many major world stock markets, its all-time high to date (6922.33 points) was reached at the peak of the dot-com bubble in September 2000.^[3] On 1 December 2003, the index's weighting system switched from being dependent on total market capitalisation to free float market cap only, in line with other leading indices.^[4]

Rules[edit]

Selection[edit]

The CAC 40 index composition is reviewed quarterly by an independent Index Steering Committee (French: Conseil Scientifique).^[2] If any changes are made, they are effected a minimum of two weeks after the review meeting.^[2] At each review date, the companies listed on Euronext Paris are ranked according to free float market capitalisation and share turnover over the prior 12 months.^[5] From the top 100 companies in this ranking, forty are chosen to enter the CAC 40 such that it is "a relevant benchmark for portfolio management" and "a suitable underlying asset for derivatives products".^[5] If a company has more than one class of shares traded on the exchange, only the most actively traded of these will be accepted into the index (generally this will be the ordinary share).^[5]

Weighting[edit]

The CAC 40 is a capitalization-weighted index. The number of shares issued (used to calculate the market cap and hence the index weight) of a company is reviewed quarterly, on the third Friday of March, June, September and December.^[2] Since December 2003, the index weightings of companies in the index have been capped at 15% at each quarterly index review,^[5] but these range freely with share price subsequently. A capping factor is used to limit the weights to 15% (if necessary), and is reviewed annually by the Index Steering Committee on the third Friday of September.^[5]

Calculation[edit]

The index value I of the CAC 40 index is calculated using the following formula:^[5] {\displaystyle I_{t}=1000\times {\frac {\sum _{i=1}^{N}Q_{i,t}\,F_{i,t}\,f_{i,t}\,C_{i,t}\,}{K_{t}\,\sum _{i=1}^{N}Q_{i,0}\,C_{i,0}\,}}} with t the day of calculation; N the number of constituent shares in the index (usually 40); Q_i,t the number of shares of company i on day t; F_i,t the free float factor of share i; f_i,t the capping factor of share i (exactly 1 for all companies not subject to the 15% cap); C_i,t the price of share i on day t; Q_i,0 the number of shares of company i on the index base date; C_i,0 the price of equity i on the index base date; and K_t the "adjustment coefficient for base capitalization" on day t (reflecting the switch from the French franc to the Euro in 1999).

Holders[edit]

Although the CAC 40 is almost exclusively composed of French-domiciled companies, about 45% of its listed shares are owned by foreign investors, more than any other main European index.^[6] German, Japanese, American and British investors are amongst the most significant holders of CAC 40 shares. This large percentage is due to the fact that CAC 40 companies are more international, or multinational, than any other European market. CAC 40 companies conduct over two-thirds of their business and employ over two-thirds of their workforce outside France.^[7]