Both indexes arrive at a number by tracking the price movements of a representative list of stocks. Learn the difference between these two indexes.
The Dow Jones Industrial Average (DJIA) and the Standard & Poor's 500 Index (S&P 500) are the two most widely followed American stock market indexes. Although many market-watchers have a preference for one or the other, they have the same purpose: to provide a big-picture view of whether stock prices are generally moving up, down, or sideways from moment to moment, and by how much.
Both indexes arrive at a number by tracking the price movements of a representative list of stocks. There is a bit of overlap, but each selects its own list of stocks and uses its own methodology.
The DJIA tracks the stock prices of 30 of the biggest American companies, while the S&P 500 tracks 500 large-cap American stocks. Both offer a big-picture view of the state of the stock markets in general.
Read this article for a more detailed comparison.