See bellwether stock.
It's any security which is thought to be the general standard, or gauge of industry performance. Sometimes this is because a particular stock thoroughly exemplifies industry trends, and other times (more commonly) it is because that particular security is large and relevant enough to have a deciding impact on the direction of its industry or sector.
As goes the barometer stock, so goes the sector.
Generally. JP Morgan Chase and Intel are thought of as barometer stocks for the finance and tech sectors, respectively. They survive in good weather or bad...but they get wet when it rains.
Related or Semi-related Video
Finance: What is the Dow Jones Industria...2710 Views
finance a la shmoop- what is the Dow Jones Industrial Average? well it's just
an index. it's a basket of 30 industrial stocks hence the catchy industrial word [list of the 30 stocks involved in the Dow]
in there and it was started in 1896 by Charles Dow and Edward Jones sort of the
Coke and Pepsi of stock averages in the day .worth noting is the fact that while
the Dow average is quoted often in the press it's not something that real Wall
Street traders really rely on that much as a market place holder anymore. why?
well because the Dow comprises only 30 stocks. it isn't really a broad market [Dow Jones in the trash]
representation, and you know the way the S&P 500 is the 500 is bigger than 30. Big
Brother has way more stocks and is thus way more liquid than the relatively
blippi set of 30 stocks that the Dow offers. over time the Dow has changed as
companies were bought and/or died and or just withered and became no longer
relevant. i.e. newspaper industry. which means that this thing has gone through
more faces than Kanye West .yeah. [Kanye West faces pictured]
Up Next
What is the S&P 500? It's Standard & Poor's 500 generally largest companies, with a U.S. domestic bias. The S&P 500 is usually what investors think...
The Russell Index is a series of indices that tracks the progress of stocks in a given basket. Aw. We were hoping it tracked adorable Jack Russell...
The Wilshire 5000 is an index fund, which is kind of a bummer...it sounded like a cool financial robot.