Simple Research Study – Stock Market from a High Level

S&P 500, Nasdaq and Dow Jones Industrial Averages

Introduction

Background

The stock market is a large indicator of the health of the economy in the United States. Understanding the stock market from a high level is important because we would be able to predict when dips or small crashes in the market occur. For this study, we are going to be reviewing the Nasdaq, Dow Jones, and S&P 500 market indexes and examining the market values.

Stock Market Indexes

For those who are new to the stock market and terminologies, the stock market index is a measurement of a portion of the stock market. Each index does not track every single stock price at a given time, but they do track a decent number in volume. Each company’s stock included in the index is are averaged by a weighted average.

The Dow Jones market index makes up the top 30 largest companies, the S&P 500 makes up of large 500 companies, while the Nasdaq includes about 5,000 different stocks. Although Nasdaq combines more stocks, Dow Jones consists of higher volume and value companies.

Data

Date Pulled: 08/29/2017 11:30pm

Total Snapshots per Index: 2,083

First Date Captured: September 2, 1977

Last Date Captured: August 29, 2017

Dataset: Nasdaq, Dow Jones, S&P500

Results

High Level View

From the initial view, you may notice the dramatic drops and climbs in the Dow Jones and Nasdaq. Let’s observe what happened during the major drops and the frequency of each drop.

S&P 500, Nasdaq and Dow Jones Industrial Averages

The 2008 Stock Market Recession

October 12, 2007, the Dow Jones index was the highest recorded ever. In 2007, the Dow Jones index increased 15.2 times in value than in September of 1977. Understanding this may help understand why the 2008 recession was so tough for so many people. Keep in mind that the Dow Jones comprises of 30 of the largest companies which employee 6,430,670 people. See the 30 companies in the Dow Jones below.

Dow Jones Historical

In March 6, 2009, the market dropped nearly 53% within 73 weeks, which is almost a 3 percent drop every month. It wasn’t until March 1, 2013 that the market went back up to where it was in 2007, over 5 years to recover. The Nasdaq and the S&P 500 followed a similar trend as the Dow Jones

Nasdaq HistoricalS&P 500 Historical

Dow Jones 30 Companies

Dow Jones consists of the 30 largest companies. Each company has a total number of shares and each share is worth a dollar amount. The table below is pulled from CNN Money. The total employees column was pulled from other sources.

Company Price Volume YTD Change Volume * Price Total Employees
MMM 3M  $202.92 991,291 13.64%  $201,152,769.72 89,800
AXP American Express  $85.42 2,779,385 15.31%  $237,415,066.70 62,500
AAPL Apple  $162.91 29,516,910 40.66%  $4,808,599,808.10 116,000
BA Boeing  $240.49 3,535,465 54.48%  $850,243,977.85 174,225
CAT Caterpillar  $116.01 4,355,661 25.09%  $505,300,232.61 95,400
CVX Chevron  $107.86 3,230,570 -8.36%  $348,449,280.20 61,500
CSCO Cisco  $31.48 16,362,658 4.17%  $515,096,473.84 71,883
KO Coca-Cola  $45.45 7,762,162 9.62%  $352,790,262.90 146,200
DIS Disney  $102.57 6,011,650 -1.58%  $616,614,940.50 195,000
DD E I du Pont de Nemours and Co  $82.24 1,832,308 12.04%  $150,689,009.92 52,000
XOM Exxon Mobil  $76.45 7,060,375 -15.30%  $539,765,668.75 83,700
GE General Electric  $24.44 23,910,062 -22.66%  $584,361,915.28 333,000
GS Goldman Sachs  $219.96 2,369,131 -8.14%  $521,114,054.76 33,300
HD Home Depot  $149.84 5,368,723 11.75%  $804,449,454.32 385,000
IBM IBM  $143.14 3,009,520 -13.77%  $430,782,692.80 386,558
INTC Intel  $34.73 15,843,668 -4.25%  $550,250,589.64 106,700
JNJ Johnson & Johnson  $132.21 3,277,875 14.76%  $433,367,853.75 127,100
JPM JPMorgan Chase  $91.10 10,886,082 5.57%  $991,722,070.20 250,355
MCD McDonald’s  $159.38 3,283,371 30.94%  $523,303,669.98 375,000
MRK Merck  $63.12 6,564,714 7.22%  $414,364,747.68 70,000
MSFT Microsoft  $73.05 11,478,382 17.56%  $838,495,805.10 120,849
NKE Nike  $52.73 12,539,931 3.74%  $661,230,561.63 62,600
PFE Pfizer  $33.50 12,224,026 3.14%  $409,504,871.00 96,500
PG Procter & Gamble  $92.32 3,676,277 9.80%  $339,393,892.64 105,000
TRV Travelers Companies Inc  $123.01 1,476,237 0.48%  $181,591,913.37 30,000
UTX United Technologies  $118.70 5,572,881 8.28%  $661,500,974.70 197,200
UNH UnitedHealth  $196.73 2,072,225 22.93%  $407,668,824.25 230,000
VZ Verizon  $48.51 6,044,054 -9.12%  $293,197,059.54 162,000
V Visa  $103.77 7,135,312 33.00%  $740,431,326.24 11,300
WMT Wal-Mart  $78.77 7,665,191 13.96%  $603,787,095.07 2,200,000

Below is the stock value of the Dow Jones companies as of August 29, 2017. Boeing and Goldman Sachs holds the lead.

Dow Jones 30 Companies Single Stock Value

Each company gives a portion of their value to a shareholder. This is called a stock. Each company doesn’t allocate an equal number of stocks for the company, some may have 10,000 and others may have 29,000,000, which is Apple’s case. If a single person were to purchase every single stock that Apple has, they would need 4.8 trillion dollars.

Dow Jones 30 Companies Single Stock Volume

A company my be extremely wealthy, but the economist will ask, how many employees does the company employ? As we can see, Wal-Mart is the winner. Wal-Mart employs more employees than the state of New Mexico, the 36th largest state in the United States.

Dow Jones 30 Companies Total Employees

Conclusion

Taking a look at the stock market from a high level is beneficial. From this study, we learned:

  • In 2007, the Dow Jones index increased 15.2 times in value than in September of 1977
  • In March 6, 2009, the market dropped nearly 53% within 73 weeks
  • If a single person were to purchase every single stock that Apple has, they would need 4.8 trillion dollars
  • Wal-Mart employs more employees than the state of New Mexico, the 36th largest state in the United States

Leave a Reply