A:

The actual list of all 500 stocks in the S&P 500 is called the Constituent List. It can be found on the official Standard & Poor's website under the Equities Indexes section.

To be added to the S&P 500, a stock must meet a broad spectrum of criteria, including a total market capitalization of at least $5 billion. Additionally, the stock must be issued by a U.S. company, have four consecutive quarters of positive earnings, and also meet certain liquidity requirements. Companies may be removed from the S&P 500 if they deviate substantially from these standards.

Unknown to most investors is the fact that the S&P 500 is a market capitalization weighted index. This means that the more valuable an individual company's stock becomes, the more it contributes to the S&P 500's overall return. It is not uncommon for three-quarters of the index's return to be linked to only 50 to 75 stocks. Hence, the addition or subtraction of smaller companies from the index most likely will not have a noticeable impact on the overall return of the index.

For more about calculating market movements, read Calculating the Dow Jones Industrial Average.

This question was answered by Ken Clark.

RELATED FAQS
  1. What's the difference between the Dow Jones Industrial Average and the S&P 500?

    The major difference between these two indexes is that the Dow Jones Industrial Average (DJIA) includes a price-weighted ... Read Answer >>
  2. What are the pros and cons of using the S&P 500 as a benchmark?

    Learn about the advantages and disadvantages of using the S&P 500 as a benchmark for portfolio performance, and understand ... Read Answer >>
  3. How do indexes determine which stocks are removed or added to them?

    Stock indexes are formed based on the kinds of stocks or financial securities they want to track. For example, the Standard ... Read Answer >>
  4. How is the value of the S&P 500 calculated?

    The S&P 500 is a U.S. market index that gives investors an idea of the overall movement in the U.S. equity market. The value ... Read Answer >>
  5. What does the S&P 500 index measure and how is it calculated?

    Learn about what exactly the S&P measures and why it's used by market participants as a tool to understand the broader stock ... Read Answer >>
Related Articles
  1. Investing

    S&P 500 Index: A Performance Analysis of Long-Term Returns

    Discover how to gain insight into the returns generated by the S&P 500 Index over the long term and how this can assist your investment goals.
  2. Investing

    The S&P Alternatives

    Mixing up the S&P 500 can achieve great results.
  3. Investing

    Total Stock Market Vs. S&P 500 ETF: Which One to Choose?

    Learn about how broad-based equity market exchange-traded funds can differ from one another and what you should consider when selecting one for your portfolio.
  4. Investing

    S&P 500 ETFs: Market Weight Vs. Equal Weight (RSP, SPY)

    Both S&P 500 and S&P 500 EWI indexes include the same set of stocks, but different weighting strategies give them separate individual properties.
  5. Insights

    An Introduction to Stock Market Indices

    Investopedia explains the five most talked about indices and what makes them all different.
  6. Investing

    How the S&P 500 and Russell 2000 Indexes Differ

    The S&P 500 and Russell 2000 are used as benchmarks for broader segments of the U.S. stock market. Each index has its own approach to measuring stocks.
  7. Investing

    The One ETF To Own The Top Internet Company Stocks

    Grab a pie of booming online businesses in one shot! Here is the one ETF that lets you own stock in the top Internet companies.
  8. Investing

    What The Dow Means And Why We Calculate It The Way We Do

    Investors worldwide refer to the Dow every single day, but do you know why we use that formula?
  9. Financial Advisor

    The 4 Best S&P 500 Index Funds

    Discover detailed analysis of the best S&P 500 Index funds, and learn about their characteristics, historical statistics and suitability.
  10. Insights

    Why You Need To Know About S&P Dow Jones Indices

    This Article introduces the S&P Dow Jones Indices (SPDJI), available variant categories and index trading advantages
RELATED TERMS
  1. S&P Phenomenon

    The tendency for a stock that has been recently added to the ...
  2. Standard & Poor's 500 Index - S&P 500

    An index of 500 stocks chosen for market size, liquidity and ...
  3. Standard & Poor's - S&P

    The world's leading index provider and the foremost source of ...
  4. Constituent

    A single member of an index. A constituent is typically a stock ...
  5. S&P 600

    An index of small-cap stocks managed by Standard and Poor's. ...
  6. Russell Small Cap Completeness Index

    A capitalization weighted index composed of all of the Russell ...
Hot Definitions
  1. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  3. Down Round

    A round of financing where investors purchase stock from a company at a lower valuation than the valuation placed upon the ...
  4. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  5. Portfolio Investment

    A holding of an asset in a portfolio. A portfolio investment is made with the expectation of earning a return on it. This ...
  6. Treynor Ratio

    A ratio developed by Jack Treynor that measures returns earned in excess of that which could have been earned on a riskless ...
Trading Center