1. Headline
  1. Headline
By John W. Schoen Senior Producer
msnbc.com

Q: It was mentioned that Google is going to be listed on the Nasdaq instead of Dow. Could you explain why a company would be listed on one instead of the other?  How does the NYSE or Nasdaq benefit by listing the companies?  Is there some kind of bidding process?  What does the newly listed company get out of the deal? I don't really understand the behind-he-scenes details. —Jim H., Warren, Mich.

  1. Stories from
    1. The Voice's Top 10 Is Revealed in Dramatic - and Confusing - Fashion
    2. Get the Look: Whitney Port's Pretty Dinner Table
    3. The Wahlberg Family's Boston Marathon Photo Diary
    4. Get an Exclusive Look Into Niki Taylor's Home and Closet in a Sweet Video Series
    5. Uma Thurman Ends Engagement to Arpad Busson

A: You're not alone. The inner workings of Wall Street are a lot like the political process or the manufacture of sausage: Most people would prefer not to look too closely. And Wall Street, for its part, prefers it that way. The less you know about the mechanics of buying and selling stock, the easier it is to charge you fees you're probably not even aware of. (Which is one reason we write the column.)

As for stock trading regulations, there are several layers — some set by the SEC or state securities regulators, others by the exchanges that "list" shares for trading. In general, the New York Stock Exchange requires that companies have a greater market capitalization (the total value of all shares being traded) than the Nasdaq.  These exchanges have various sources of income, but one of them is the fees they charge companies to be listed.

In the past, most companies "moved up" to the NYSE as they grew. But following the tech bubble of the 90s, many larger cap tech stocks chose to remain on the Nasdaq.

The Dow, on the other hand, is not an exchange: It's an index maintained by the publishers of the Wall Street Journal. It's simply a way to track the movement of the overall stock market. But it consists of 30 large companies listed on both the NYSE and Nasdaq, so many people prefer to watch a broader index (like the S&P 500) which tracks 500 stocks.

One reason we all still follow the Dow is that it's been around the longest, started over a hundred years ago by company founders Charles Dow, Edward Jones and Charles Bergstresser.  The three eventually settled on the shorter Dow, Jones and Co. as the name for their company — to the great relief of radio and TV announcers ever since.

© 2013 msnbc.com Reprints

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

More on TODAY.com

  1. Robyn Beck / AFP/Getty Images

    Lupita Nyong’o is People’s Most Beautiful person

    4/23/2014 11:54:41 AM +00:00 2014-04-23T11:54:41
  1. ‘Sharing economy’ can bring convenience, cash... and trouble

    It’s a multibillion-dollar industry: More and more companies connecting strangers to share, swap and rent everything from clothes to bikes to children’s toys. But all that trust can cause trouble.

    4/23/2014 12:10:09 PM +00:00 2014-04-23T12:10:09
  1. Courtesy of Savannah Guthrie

    Savannah’s honeymoon dispatch: Letting it hang out on the best vacation ever

    4/23/2014 10:56:55 AM +00:00 2014-04-23T10:56:55
  1. Reuters

    video Obama greeted in Japan by Caroline Kennedy

    4/23/2014 11:44:08 AM +00:00 2014-04-23T11:44:08
  1. Does your mom deserve a Mother’s Day surprise? Tell us why

    Moms do it all, and sometimes we don't always express our appreciation. If only there was a special day set aside to show mom how much we love her...

    4/22/2014 2:42:00 PM +00:00 2014-04-22T14:42:00