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 Topic Thread:

Reading the Business Section




The first thing you need to realize is that you are reading yesterday's closing prices.  If you are reading Monday's newspaper (or Saturday’s or Sunday's newspaper) the listings are for Friday's closing prices.  This, of course, is obvious but needs to be stressed because a lot can happen to a stock's price by the time your read about it in the newspaper.  If you are reading the newspaper at lunch time, keep in mind that what you are reading is practically 2 days old.

Finding your stock can sometimes be difficult.  Most newspapers list the most popular stocks, while others like the Wall Street Journal are more complete.  Assuming the stock you are following is in the paper you are reading, the first thing you need to do is look at the top of the page to find the proper exchange for your stock.  It most likely is listed on the NYSE, NASDAQ, or the AME.

The stocks are usually listed alphabetically by the company name's abbreviation.  It's Ticker symbol is often easier to spot if you know it.

Here are some column headings for stocks and what they stand for:

Div - This shows the stocks annual dividend pay out.  Some stocks (such as growth stocks) invest their income back into the company rather than paying it out as dividends to the shareholders.  This is why for a lot of stocks this column will be empty.

Yld % - The yield percentage is simply the dividend divided by the closing price. (Rather than bringing your calculator every time you look at the paper they do this for you).

P/E ratio - This is the current price divided by the earnings for the year.  If your stock has a P/E of 20, that means that with its current earnings, it will take twenty years for the company to earn what you are paying for it (at the current price).

52 week Hi / Low - This shows the stock price over the previous years time.  It does not include the price you are looking at.

Volume or Sales - This is the number of round lots traded for that stock on that day.  This is not the total number of shares outstanding (get that from their annual report).  Add 00 to the number for the total quantity that was traded.

Hi / Low and Close for the day - The closing price is what you came to see.  The hi and low is an indication of that stocks volatility for the day.

Net Change - This is the difference in closing price you are looking and the previous day's closing price.

Bold, Underlined, Footnotes, etc. - If the close has changed more than 5%, or the volume traded that day was higher than normal

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