The Standard and Poor’s index, more commonly known as the S&P 500, or simply the S&P, or SPX, is a stock market index that tracks the stock performance of 500 of the largest publicly traded companies in the United States, weighted by market capitalization.
The index is commonly used to give an indication of how the U.S. stock market is performing and provides a benchmark for financial experts. It offers investors a way to measure success and many investors, as well as professionals such as analysts, hedge fund managers, and financial bloggers aim to beat the S&P 500.
In total there are 505 companies in the S&P. The index includes stocks from 11 sectors – Communication Services, Consumer Discretionary, Consumer Staples, Energy, Financials, Health Care, Industrials, Materials, Real Estate, Technology, Utilities.
Since the index is weighted by market capitalization, the largest companies have a significant influence on its performance. These companies include Alphabet (Google), Amazon, Apple, Facebook, Johnson & Johnson, and Microsoft. While many companies in the index are household names, some are less well known.
As stock prices and numbers of shares are constantly changing, the composition of the S&P occasionally changes.