There are a variety of stock market indices that investors keep an eye on, the most famous of which is probably "the Dow" - referring to the 30 components making up the Dow Jones Industrial Average. Thirty is a relatively small number of stocks, and various other indices encompass a much greater number of stocks.
The S&P 500 index, covering a full 500 components, is widely regarded as the best measure of how large cap U.S. equities are performing as a group. Because of the broad importance of the S&P 500 index, any stock that is chosen to enter the S&P 500 immediately gains wide analyst coverage. That broad coverage by the major analysts means that it is possible to take an average of all the analyst opinions out there on any S&P 500 company, and get a good sense of what analysts as a group think about the stock on average.
By computing the average analyst opinion for every S&P 500 company, and then using those results to rank the 500 components, we are able to get an ever-changing picture of which companies analysts are the most bullish about, to most bearish about. Keep following Market News Video for daily updates about S&P 500 components moving in rank.
For MarketNewsVideo.com, I'm Tracey Fitzpatrick.