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When the stock market falls overnight with bad news, and opens lower the morning where did the money go?

My understanding is that for every share sold there is a share bought. Someone is betting it will go up and some one is betting it will go down. Look at this scenario: Tom sells 100 shares of XYZ at $14.00 per share, Kay buys 100 shares of XYZ at $14.00, this is all on Friday afternoon before the bell. I do suppose the exchange gets a few cents for doing the trade, does any one know how much? The shares that Kay bought at $14.00 I assume had to be sold at $13.95 or so to give the exchange a profit? Is this right?
The next morning before the bell there is bad news out and overseas trading was down while we slept. The whole market opens way down. XYZ is $2.00 dollars down when the opening bell rings. Where did the $2.00 go. Kay had just bought that afternoon 100 shares for $2.00 more than what the share price opened at. Where did this $2.00 go?

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Saturday, March 13th, 2010 news 4 Comments

Dow Jones Index

The Dow Jones Industrial Average (NYSE: DJI, also called the DJIA, Dow 30, INDP, or informally the Dow Jones or The Dow) is one of several stock market indices, created by nineteenth-century Wall Street Journal editor and Dow Jones & Company co-founder Charles Dow. It is an index that shows how certain stocks have traded. Dow compiled the index to gauge the performance of the industrial sector of the American stock market. It is the second-oldest U.S. market index, after the Dow Jones Transportation Average, which Dow also created. The average is computed from the stock prices of 30 of the largest and most widely held public companies in the United States. The "industrial" portion of the name is largely historical—many of the 30 modern components have little to do with traditional heavy industry. The average is price-weighted. To compensate for the effects of stock splits and other adjustments, it is currently a scaled average, not the actual average of the prices of its component stocks—the sum of the component prices is divided by a divisor, which changes whenever one of the component stocks has a stock split or stock dividend, to generate the value of the index. Since the divisor is currently less than one, the value of the index is higher than the sum of the component prices.
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