The stock market is measured in points, so what does a point equate to?

At some point far in the past, they nominated a day at which the basket of shares they were using (e.g. the top 100, the top 500) were worth 100 points. The current value of the stock exchange is what that basket would be worth today.

It gets more complicated, because as companies slip out of the top 100, or get taken over, or whatever, they have to replace them with new ones. But the weighting of the new ones is arranged so that the change does not change the current value of the basket.

But basically, 100 points is the value of a basket of top-100 shares, probably back in about 1880, and the current level is the value of the successor of that same basket today,

"The stock market has been a huge generator of wealth as well as a source of funding and liquidity for companies. As stock ownership becomes more widespread, particularly due to participation in retirement plans such as 401(k)s and IRAs, additional media sources cover the markets in more ways. The terminology can sometimes be confusing, but is often simple to understand with some background."

"Instructions
Difficulty: Moderately Easy

Step 1
Verify the type of stock market points you are viewing. There is a difference between points as they apply to individual stock and as they apply to stock market indexes.

Step 2
Read points as dollars if you are talking about an individual stock. For example, if IBM stock is up 4 points, then it is up $4.

Step 3
Interpret fractional points on individual stocks as percentages or fractions of a whole dollar. Historically, stocks did not trade in dollars and cents, but rather down to specifically dictated fractions such as 1/8, which is 1/8 of a dollar. Since stocks began to trade in cents instead of fractions, fractional points can also be equivalent to decimal points. For example, 4 1/2 points is equal to $4.50, and 4.50 points is also equal to $4.50.

Step 4
Read points as "units of movement" when talking about changes in stock market indexes, NOT as dollar amounts. For example, a 50 point move (as in the Dow Jones Industrial Average was up 50 points today) does not represent an increase of $50 but rather an increase of units in the average. The value of a single unit fluctuates and is represented by the Dow Divisor."

"Tips & Warnings:
The term "points" is widely used in investing and is defined differently depending upon its context. For example, with regard to bonds, a point represents 1/100 of a percent, while in real estate lending, a point is generally 1 percent."
Source and further information:
http://www.ehow.com/how_4781395_understand-stock-market-points.html

Further information:
http://en.mimi.hu/stockmarket/points.html
http://www.enotes.com/soc/q-and-a/explain-what-points-stock-market-what-fall-gain-45173
http://www.mudcat.org/thread.cfm?threadid=114804&messages=12

It varies on what it is , ie FTSE, Nikkei, etc. 1 point will be a certain value of stocks , or a unit of value of a business

a percent

1 point = 1 dollar

The Indices on the stock market indices i.e Nifty,Dow Jones,Nasdaq,DAC etc represent movement in some particular stocks and some of them also show the representation of all the stocks in the market.Thus the on the whole these points on the indices represent the movement in the value of the share prices in various stocks listed on the stock exchange...