Stock Price Charts

What does it mean when stock index falls 200 points?

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1. A stock index is a mathematical weighted average on the price of a group of stocks, multiplied by some arcane factor and calculated by a computer. All it means is that the result of the calculation at the end is 200 less than it was before. To understand the real meaning you have to understand why the index was put together, what it is supposed to measure, what is the historical volatility of the index, how the general market behaved, why certain stocks went up or down, etc.
2. A stock market index is a listing of stocks and a statistic reflecting the composite value of its components. The index is generally a average weighted value of the stocks included in the index. While there are different strategies for weighting (market share weighted, market value weighted, price weighted, etc.), a drop of 200 points means that the weighted average value all of the stocks included in the index dropped $200.
3. "What does it mean when stock index falls 200 points?" It doesn't mean much unless we know where it was before it fell. If we know the price, then we can calculate the percentage (the size of the fall). A 1% fall is no big deal. If the stock index is at 20,000 and falls 200 points, then that's a 1% drop. No big deal. A 2-3% drop is normal too. If it's a 8-10% drop, then you need to pay attention. If an important stock index such as DJIA or SPX falls 20%, it means we're in a bear market. In a bear market, even good stocks tend to go down. For example: The recent high in SPX was 1555. 20% down is 1244. In this case, someone might call a 311-point drop the beginning of a new bear market.
4. means the average stock (that is counted by the indices) is falling by 200 points avg.