A market index tracks the performance of a specific "basket" of stocks considered to represent a particular market or sector of the U.S. stock market or the economy.
There are indices for almost every conceivable sector of the economy and stock market. Many investors are familiar with these indices through index funds and exchange-traded funds whose investment objectives are to track the performance of a particular index.
Here are general descriptions of a few major market indices. (The SEC does not regulate the content of these indices and is not endorsing those described here.) You can also find them described on their sponsors' websites and in the available information of the funds that track them.
Dow Jones Industrial Average (DJIA)
The Dow Jones Industrial Average is an index of 30 "blue chip" stocks of U.S. industrial companies. The Index includes a wide range of companies—from financial services companies, to computer companies, to retail companies—but excludes transportation and utility companies, which are included in separate indices. Unlike many other indices, the DJIA is not a "weighted" index, meaning it does not take market capitalization into account.
NYSE Composite Index
The NYSE Composite Index tracks the price movements of all common stocks listed on the New York Stock Exchange. The Index is "capitalization-weighted" (that is, each stock's weight in the Index is proportionate to the stock's market capitalization).
S&P 500 Composite Stock Price Index
The Standard & Poor's 500 Composite Stock Price Index is a capitalization-weighted index of 500 stocks intended to be a representative sample of leading companies in leading industries within the U.S. economy. Stocks in the Index are chosen for market size, liquidity, and industry group representation.
Wilshire 5000 Total Market Index
The Wilshire 5000 Total Market Index is intended to measure the performance of the entire U.S. stock market. It contains all U.S.-headquartered equity securities with readily available price data. The Index is a capitalization-weighted Index.
Russell 2000® Index
The Russell 2000® Index is a capitalization-weighted index designed to measure the performance of the 2,000 smallest publicly traded U.S. companies based on in market capitalization. The Index is a subset of the larger Russell 3000® Index.
The Nasdaq-100 Index is a "modified capitalization-weighted" index designed to track the performance of the 100 largest and most actively traded non-financial domestic and international securities listed on The Nasdaq Stock Market. To be included in the Index, a stock must have a minimum average daily trading volume of 100,000 shares. Generally, companies on the Index also must have traded on Nasdaq, or been listed on another major exchange, for at least two years.
You can also find short descriptions of these and many other market indices on the Nasdaq website.