Even if your favorite baseball team has already been knocked out of the playoffs, things seem to be looking up on Wall Street (at least for the time being). In light of the recent report on U.S. job growth, the stock market rebounded on Friday, Oct. 5. The S&P 500 hit another all time high while the Dow posted its biggest advance since September 18th, when the U.S. Federal Reserve cut interest rates. Job creation in the United States picked up in September and workers' wages grew solidly, easing fears the country is headed for recession.

The new job market snapshot released by the Labor Department today showed employers boosted payrolls by 110,000, the most in one month since last May. In an encouraging note, the economy actually added 89,000 jobs in August. That marked an improvement from the government's first estimate. The new unemployment rate of 4.7%, the highest since the summer of 2006, is still considered low by historical standards. "For the time being, the sense is the sky is not falling. We have a major concern about the magnitude of the slowdown in the U.S. economy, so this is clearly good news," said Art Hogan, chief market strategist at Jefferies & Co.

Going back to the S&P 500 and the Dow for those new to The Stock Market Game program and investing in general, what are they and what do these indices really represent? Both are used as a gauge for the overall health of the market. Unlike some other indices that are weighted according to companies' market values, the Dow is price-weighted, meaning all companies included in the index are not represented equally. It uses a divisor that determines the percentage of the Dow the stock represents according to its price. The divisor is also adjusted to reflect the effects of stock splits and dividends. Many analysts are critical of the Dow since it contains just 30 companies selected by the editors of The Wall Street Journal. Many feel the Standard & Poor's 500 (S&P 500) index, which tracks 500 major American companies, offers a more accurate reflection of the overall market. The S&P is based on companies' stock market values while the Dow is based on their stock prices.

For more information about the Dow and the S&P 500, be sure to visit finance.yahoo.com. Select your index. To find the names of the companies that make up each index, click "Components" in the left column.

To find out whether the indices were up or down last week, click "Basic Chart" in the left column. Students can determine whether the indices were up or down in the past week, the past three months, six months, one year, two years, and five years. What is the point change? Percentage change? By clicking "Historical Prices," students can also find out what the indices were on the day they were born. How many points have the indices gained since then? What percentage change is that? And if they had invested $10.00 on that date in an S&P Index Fund or a Dow Index Fund, how much would they have today?

This article was written by a staff member of The Stock Market Game.

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