Business and Personal Finance Dictionary

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• BENCHMARK
  
  Originally a benchmark was a surveyor's mark indicating a specific height above sea level. But it has come to have a much broader meaning in the world of investing. A stock market benchmark, for example, is an index or average whose movement is considered a general indicator of the direction of the overall market, against which investors and financial professionals often gauge their market expectations and judge the performance of individual stocks or market sectors. For example, the Standard & Poor's 500-stock Index (S&P 500) and the Dow Jones Industrial Average (DJIA) are the most widely followed benchmarks, or indicators, of the US market. There are also benchmarks for international markets, and for other types of investments such as bonds, mutual funds, and commodities. In a somewhat different way, the changing yield on the 10-year US Treasury bond is also considered a benchmark of investor attitudes. For example, a lower yield is an indication that investors are putting money into bonds, driving up the price, possibly because they expect stock prices to drop.
  
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