The S&P 500 is a stock market index that tracks 500 of the largest U.S. companies. It’s used as a benchmark to track the performance of the economy in which all other companies are compared. It measures the float of shares available to the public. It does not measure shares held privately by control groups, companies or the government.
The initials S&P stand for Standard and Poor. Companies must meet specific criteria in order to be a part of the S&P 500. This may not be one hundred percent accurate. The full list of holdings are based on committee, it has not been provided on its website.
- To be added to the index a company must be a U.S. company.
- Have an adjusted market capitalization of at least $10 billion.
- At least 50% of the stock must be available to the public.
- The stock price must be at least $1.00.
- Must have positive earnings for four consecutive quarters.
Companies with a larger market capitalization carry a higher percentage weight. Smaller companies carry a lower percentage weight. For example, Microsoft Corp would represent a larger percentage in the S&P 500 than Proctor and Gamble.
When you hear popular news reporters talking about the stock market, they are most likely referring to the S&P 500.
What Companies Are in the S&P 500
Below is a list of the ten largest U.S. companies included as of the writing of this article.
- Microsoft Corp.
- Apple Inc.
- Amazon Inc.
- Facebook Inc
- Alphabet A
- Alphabet C
- Johnson and Johnson
- Berkshire Hathaway B
- Visa Inc.
- Proctor and Gamble
This Index is used as a leading economic indicator of how well the US economy is doing. If people are confident in the economy, they’ll buy stocks.
How to Buy The S&P 500
Investors can purchase individual stocks that are included in the Index or buy an Index Fund or ETF such as ticker symbol VOO by Vanguard, SPDR’s ticker symbol SPY and Fidelity’s ticker symbol FXAIX.
For more information visit Forbes.com.