The stock market’s Dow Jones Industrials index recently reached the 10,000 mark and although the stock market hasn’t reached that mark in over a year, what is the significance of this seemingly random financial statistic to non-stock market investors?

The movements of the stock market reflect the confidence of investors in our economy’s corporate future. When upward or downward surges occur in the stock market, investors show their enthusiasm or distrust in the economy by purchasing or selling ownership in public-owned corporations listed on a stock market. By purchasing shares in a corporation, the investors feel confident they will profit in the near or distant future from partial ownership of that company. Investors sell of stocks to access cash, gain a profit from a stock reaching a certain price or out of fear of losing money. Investors base their decisions on a plethora of information provided by government agency reports, corporate financial statements or trends in an industry of which a corporation may hold a position. If the government issues a report that the military will need an additional 2 million tires a year for its fleet off vehicles, then public companies making tires may see an increase in their stock price, since they will improve profits by selling more tires.

At the end of every quarter (March, June, September & December) corporations report their “Profits & Loss” and other financial statements. The stock market reacts this information and the Dow Jones Industrial index and various other indices will shift up or down by causing a reaction from investors. So why does this all matter to most of us? This investor activity drives bank lending practices, rates and activity. Commerce is driven by these banks’ ability to lend to growing companies and thus creating a stable employment market and industry growth. You have a vested interest in the movements of thee stock market, whether you literally place money in one of the stock markets or not.