How Is the S&P 500 Calculated? - TheStreet Definition
An index of the 500 largest publicly traded companies, as determined by Standard & Poor's. Considered by many to be the best indicator of the U.S. stock market's general direction and health, the S&P 500's profile has been raised recently by the many portfolio-manager-beating index funds that track it. There is also an S&P 400, which tracks mid-cap companies, and an S&P 600, which tracks small-caps, but these don't get much attention. Unlike the Dow, the S&P indices are weighted by a company's market capitalization.