NYSE
When most people think of the stock exchange there is really only one thing that comes to mind, the NYSE. It is by far the biggest and most important exchange in the world and its movements are followed by almost everybody, even those who don't have money invested in the market. This is largely because of the huge influence that the NYSE has on the economy as a whole.
The NYSE or the New York Stock Exchange is the largest stock market in the world, by a pretty substantial margin. When people refer to Wall Street this is what they are talking about, that is where the exchange is located. It has been there for more than two hundred years starting when it was founded in 1792. The original exchange was simply a group of brokers meeting under a tree on Wall Street to make trades. Over the years it moved several times with the trades usually being conducted in nearby coffee houses. The exchange moved to its current location in 1865 although the original building has been replaced by a new one.
Trades on the New York Stock Exchange are still conducted in the way that they always have been with floor traders making trades with each other right on the floor. This is when you see the brokers yelling at each other and making hand signals. Over the years they have developed a code that allows them to trade billions of dollars of stock everyday based on those hand signals. In order to make trades it used to be necessary to have a seat on the exchange. These were strictly limited in number and were often sold at prices of well over a million dollars. However in 2005 the exchange bought back all of the seats and they now grant one year licenses to brokers. Anybody wanting to buy or sell stock needs to make their trade through one of these brokers.
The New York Stock Exchange has maintained its traditional way of doing business but it has also kept up with the changing times. It is now possible to trade stocks on the exchange electronically, although these still go through a broker. When trades are made electronically they are sent directly to the floor for a broker to execute the trade.
The most well known part of the NYSE for a lot of people is the Dow Jones Industrial Average. This is simply a composite of thirty of the largest stocks on the exchange in various industries that is supposed to give an idea of how strong the market is. It is generally agreed that the Dow is not really the most useful way to measure this because of the small number of companies included and the fact that other composites take a much larger picture. However the Dow is still by far the most widely reported and considered by many to be the most important measure of market strength.