Market-value weighted index

A stock index in which each stock is weighted by market value. A change in the price of any stock will influence the index in proportion to the stock's respective market value. The weighting of each stock is determined by multiplying the number of shares outstanding by the stock's market price per share; therefore, a high-priced stock with a large number of shares outstanding has more impact than a low-priced stock with only a few shares outstanding. The S&P 500 is a value weighted index.