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The Stock Market

The Stock Market. Miss Varee Period 0, 1, and 2 AP Economics. Overview. If a company wants to grow—maybe build more factories, hire more people, or develop new products—it needs money. It could get a loan from a bank. But then it would owe money.

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The Stock Market

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  1. The Stock Market Miss Varee Period 0, 1, and 2 AP Economics

  2. Overview • If a company wants to grow—maybe build more factories, hire more people, or develop new products—it needs money. • It could get a loan from a bank. But then it would owe money. • By issuing stock, a company can raise money without going into debt. • People who buy the stock are giving the company the money it needs to grow.

  3. What exactly is a stock? • Owning stock in a company means owning part of that company. • Each part is known as a share. If a company has issued 100 shares of stock, and you bought one, you own 1% of that company. • People who own stock are called stockholders or shareholders.

  4. The S&P 500 is a stock market index containing the stocks of 500 Large-Capcorporations, all of which are from the United States. Standard and Poor’s 500

  5. Dow Jones Industrial Average • The Dow Jones Industrial Average (NYSE: DJI, also called the DJIA, Dow 30, INDP, or informally the Dow Jones or The Dow) is one of several stock market indices, created by nineteenth-century Wall Street Journal editor and Dow Jones & Company co-founder Charles Dow. • The average consists of 30 of the largest and most widely held public companies in the United States. The "industrial" portion of the name is largely historical—many of the 30 modern components have little to do with traditional heavy industry.

  6. NASDAQ • [The NASDAQ(acronym of National Association of Securities Dealers Automated Quotations) is an Americanstock exchange. • It is the largest electronic screen-based equity securities trading market in the United States. • With approximately 3,200 companies, it has more trading volume per day than any other stock exchange in the world.

  7. How is the market doing recently? The Dow Jones peak was at 14,164 on October 9, 2007. As of November 12, 2008, it closed at 8282.66 -411.30 (-4.73%). How has the market done in past year?  The Dow Jones has been extremely volatile. In 2008, On July 2, 2008, with record-high oil and gasoline prices well above $140 per barrel and $4 per gallon. On September 15, 2008, a wider financial crisis became evident when Lehman Brothers filed Chapter 11 bankruptcy. How has the market done in past ten years?  How has the market done in past 10 years? In 1998, the Dow closed at about 8300 points. Today, it is at around the same rate. There is an overall gain of 0.4%. Historical and Recent Trends

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