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Every day, millions of investors and traders flock to the market in search of a new millionaire-maker investment. The New York Stock Exchange is the primary destination for investors from around the world to seek out new investments and pledge their capital to a variety of companies; from startups to multinational corporations with over a century of experience.
Some quick facts about the New York Stock Exchange:
The New York Stock Exchange is the largest and one of the oldest stock exchanges in the world
The NYSE has a market cap of over $22.5 trillion
The exchange was founded in 1792 in New York City
The NYSE is home to the S&P 500 and the Dow Jones Industrial Average indices
Some notable stocks from the exchange include ExxonMobil, JP Morgan Chase, Boeing, Goldman Sachs, and Coca-Cola - totaling 2,400 listings
The New York Stock Exchange is synonymous with Wall Street, as the physical exchange is located in New York City, with trading floors on 11 Wall Street and 18 Broad Street, which are now National Historic Landmarks.
"What I think of the market is the U.S. markets to the most transparent, offer the most democratized access in the world, they're volatile at times, but they're incredibly efficient and the cost for a retail investor is the lowest it's ever been" - Lynn Martin
If you are curious about the largest stock exchange in the world - this investfox guide to the NYSE is for you.
The New York Stock Exchange has a rich and vibrant history, dating back more than two centuries, and has been a cornerstone of the American and global economy ever since.
Here are some facts about the New York Stock Exchange you might not have known:
In order for companies to qualify for and maintain a listing on the New York Stock Exchange, they must adhere to strict rules enforced by the exchange. The NYSE is a prestigious exchange, which means that companies need to compete in order to acquire a listing there.
Here is an incomplete list of requirements that companies need to meet in order to list their shares on the NYSE:
These are only a handful of requirements upheld by the NYSE, which offers plenty of flexibility to companies, as most of the requirements are conditional and companies that satisfy some combination of these requirements may still be eligible to obtain a listing category on the exchange.
Another important factor to consider is the way the New York Stock Exchange generates revenue. Generally, stock exchanges make money in several ways, and the NYSE is no different. Some of the NYSE’s revenue streams include:
The amount charged by the NYSE can vary, but the general fee structure for a public company looks like this:
An average company whose shares are listed on the NYSE pays less than $500,000 per year to the exchange, which is still a considerable amount for smaller companies.
The Dow Jones Industrial Average index is often used as the measure of market stability, as all 30 constituents are very stable, mature companies with a global outreach. When these companies are not performing well, it is believed to be an indicator of the U.S.’s economic situation, or even the global economy, heading into a recession. Because of this, the DJI is one of the closely-watched equity indices on the market and has been so ever since its inception in 1885.
The Dow Jones Industrial Average, or the DJI, is one of the oldest and most followed price-weighted indices in the world. The index consists of 30 notable large public companies from various sectors of the U.S. economy, which have an outsized effect on the market. These are companies that employ the highest number of people, generate the most revenue, and are generally considered to be the cornerstones of the American economy.
It must be noted that the members of the index are subject to change and some notable past members include: DowDuPont, ExxonMobil, Pfizer, Raytheon, General Electric, AT&T, etc.
Another important thing to consider is that the Dow does not consist of only stocks listed on the NYSE as it includes constituents from the NASDAQ as well.
As already mentioned, the Dow Jones Industrial Average consists of 30 influential large companies in the United States. These companies are:
|Company||Ticker Symbol||Sector||% Weight|
|UnitedHealth Group||UNH||Health care||9.52|
|Goldman Sachs||GS||Financial services||6.60|
|Home Depot||HD||Home improvement||5.85|
|Caterpillar||CAT||Construction and mining||4.63|
|Visa class A||V||Financial services||4.48|
|Boeing||BA||Aerospace and defense||4.25|
|American Express||AXP||Financial services||3.36|
|Johnson & Johnson||JNJ||Pharmaceutical||3.15|
|Procter & Gamble||PG||Consumer goods||2.87|
|JPMorgan Chase||JPM||Financial services||2.76|
|Disney||DIS||Broadcasting and entertainment||1.91|
|Cisco Systems||CSCO||Information technology||1.01|
|Walgreens Boots Alliance||WBA||Retailing||0.68|
The S&P 500 is one of the most popular indices on the market. Investors closely track the index and often base their long-term decisions on the projections made according to the performance of the index. This is why the S&P 500 is often considered the benchmark index of the U.S. economy.
The S&P 500 index consists of 503 constituent large-cap equities that represent the bulk of the economic output of the United States.
The index is administered by the credit rating agency Standard & Poor’s (NYSE:SPGI).
The index is closely tracked by millions of investors and a number of index funds on a daily basis. The SPDR S&P 500 ETF Trust is the largest exchange-traded fund that tracks the index, with market capitalization coming in at over $350 billion. The total market capitalization of the S&P 500 exceeds $33.8 trillion - making it even larger than the United States GDP.
A common method of evaluating the United States economy is by comparing its size to the market capitalization of the S&P 500. If the index is far ahead, this means that the economy is overvalued and possibly in a bubble.
As already mentioned above, the S&P 500 is a market capitalization-weighted index that includes 503 constituent large-cap stocks. These are companies that have a well-established customer base and decades of operational history behind them.
Here is how the S&P 500 is weighted by sector:
The index is tilted towards the information technology sector, due to the sheer size of the likes of Alphabet, Apple, Meta, and Microsoft. The weighting of the S&P 500 clearly reflects the interest of investors from around the world in technology and health care, with consumer goods and financial services following behind.
No. Contrary to popular belief, the New York Stock Exchange is not the oldest stock exchange in the world. That title goes to the Philadelphia Stock Exchange, which was founded two years prior to the NYSE, in 1790.
Currently, there are 2,400+ stocks listed on the NYSE. These listings include a wide range of stocks, exchange-traded funds, real-estate investment trusts, etc.
While anyone can buy stocks listed on the New York Stock Exchange, investors can also buy shares in Intercontinental Exchange, Inc, which owns and operates the NYSE. The operator can be found under the NYSE:ICE ticker.