How to Calculate Return on Indices in a Stock Market

by Kathryn Hatter

The stock market refers to a index measuring stocks. The U.S. has a variety of indices to measure the market. The Dow Jones Industrial Average, the Nasdaq Composite and the S&P 500 represent the three most prevalent. When you calculate a return on indices in a stock market, you calculate the index price difference between two dates to determine a gain or a loss.

1. Choose the index you wish to calculate. Choose a start date and end date for calculating the return. Visit a website that offers stock market charts.

2. Find the price from the start date and the price from the end date and note these numbers. For example, to calculate return on the DJIA stock market between February 1, 2011 and September 30, 2011, find the start date price ($12,040.16) and the end date price ($10,913.38).

3. Subtract the end date price from the start date price. Using the same example, subtract 12,040.16 minus 10,913.38 to equal 1,126.78.

4. Divide the resulting number by the start date price. Using the same example, divide 1,126.78 by 12,040.16 to equal .093. The Dow Jones Industrial Average index had a 9.3 percent fall between February 1, 2011 and September 30, 2011.

5. Repeat the same formula with any stock market index using any starting and ending price.

Items you will need

  • Calculator

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