What does that really mean? since its a price weighted index, it really implies that across the thirty or so equities in it the price has risen above a certain point. I am not sure why people find it to be such an important number especially since it doesnt really reflect the true nature (marketcap weighted) of the market.
whats different between DOW 10k and dow 9950K. To me both numbers sound sorta “nice”. I sense the market once again is getting ahead of itself and we will soon start seeing those incredilous IPOs of 600% plus in a day.
With the financial markets making a lot of the money off these markets, arent they basically biased to the market place in that they need it to exist and hence the hype that follows anything in there is essential to their business. Its almost like the analyst ratings that go from Hold to strong buy whatever happened to drop the darn thing
ok as soon as i went on yahoo and i saw this news also, i msged couple ppl on my msn list and they werent able to tell me wat is DOW JONES? who are they? Why so many different symbols for dow jones?
Dow Jones is the company that owns the Dow (exhange) and the Wall Street Magazine and all its related companies.
The Dow index is a an index of about thirty company stocks that is based on the prices of the stocks without looking at the total market cap (ie stock price x number of stocks issued).
My question was to do with whats with all the hoopla over Dow 10,000?
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*Originally posted by hmcq: *
Dow Jones is the company that owns the Dow (exhange) and the Wall Street Magazine and all its related companies.
The Dow index is a an index of about thirty company stocks that is based on the prices of the stocks without looking at the total market cap (ie stock price x number of stocks issued).
My question was to do with whats with all the hoopla over Dow 10,000?
[/QUOTE]
It's all psychological. Round numbers represent perceived signficant breakpoints to a lot of people. Let me give an example. Have you ever wondered why so many articles for purchase have a price of $9.95, or $19.95 or $49.95? Why not make things easy and price them at $10, $20 and $50?
There have been extensive market studies by professional marketing companies that conclusively demostrate that you will sell far more of a product at $9.95 than you will at $10. The nickle difference is really insignificant in dollar terms. BUT, the perceived price of $9.95 is much lower than the perceived price of $10.
In the markets, round hundred point numbers are more significant than non hundred point numbers. Round thousand point numbers are more signficiant than round hundred point numbers. And 10,000 therefore has some disproportionate perceived importance than either round hundred or thousand point numbers. Just because it makes no logical sense to view 10,000 as much more significant than 9,999, you can't underestimate its importance when you have to make your own investment decisions. Because people think it is significant, it becomes signicant.
Well, its sortof like what myvoice said. DOW used to be in the 12k range before it crashed in 2000. It hitting the 10k mark for the first time in 3 yrs is somewhat exciting. Ppl have been hoping it to get to that mark for a while. Hence....
myvoice :k: its all psychological hmcq. From a technical analyst’s viewpoint, various levels of support/resistance and crests are built for each equity market. This is a moving band kinda thing. If the market gets atop a certain resistance level, it sort of moves into a higher level of trading range. For e.g. for the Karachi Stock Exchange, getting over 4,000 points was a psychological barrier. Once its above it, its trading range tends to be between 4,100 to 4,300 points. The next barrier for it is 4,500 points and so on, you get the drift?
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*Originally posted by hmcq: *
I thought the difference between the 10 and 9.95 also had to do with different sales taxes on different prices.
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Not true (at least as sales tax is imposed in the US system). Income tax rates are supposedly progressive meaning that the marginal rate depends upon how much one earns. The more one earns, the higher is his/her rate of taxes.
Sales taxes on the other hand are regressive and the rates are fixed. If a state has a 6.25% sales tax, it is 6.25% on the $20,000 car and it is 6.25% on the $200 bicycle. Thus, pricing an item for sale at 9.95 instead of 10.00 has nothing to do with the rate of sales tax applied to the transaction. It has everything to do with the pyschology of marketing.
whatever happened to drop the darn thing