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This Day In Market History: The S&P 500 Index Launches

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This Day In Market History: The S&P 500 Index Launches

Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.

What Happened

On this day in 1957, the Standard & Poors launched the S&P 500 index.

Where The Market Was

The Dow closed at 471.48 and the S&P 500 traded at 44.06. Today, the Dow is trading at 26,026.32 and the S&P 500 is trading at 2,803.69.

What Else Was Going On In The World

In 1957, the Soviet Union launched Sputnik 1, the first ever space satellite. Toy company Wham-O released the Frisbee in the U.S. market. The average price of a new car was $2,749.

S&P 500 Born

S&P launched its first stock index way back in 1923, but it’s S&P 500 index launched in 1957 has become the gold standard of U.S. stock indices. The S&P 500 is an index comprised of the largest 500 U.S. equities, and it is calculated based on a free-floating market cap-weighted formula.

“I would say it’s the primary index,” TD Ameritrade chief market strategist J.J. Kinahan told Benzinga. “It’s an amazing advancement because although the Dow at its time was revolutionary, it’s only 30 stocks and it's price weighted.”

Since its launch, the S&P 500 has generated an overall return (excluding dividends) of 6,310 percent, outpacing the Dow Jones Industrial Average’s 5,450 percent return in that same time. Excluding dividends, the S&P 500 index itself has produced an average compound annual growth rate of just above 7 percent.

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Photo from the "I Feel Pretty" musical number from "West Side Story." Pictured from left: Elizabeth Taylor, Carmen Gutierrez, Marilyn Cooper, Carol Lawrence.

Posted-In: J.J. Kinahan Standard & Poor’s 500 this day in market historyEducation Top Stories Markets Interview General Best of Benzinga

 

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