Just about every financial news outlet covers three major U.S. stock market indices: the Dow Jones Industrial Average, the NASDAQ Composite, and the S&P 500. These indices are much more interrelated than you might think.

The righthand Venn diagram depicts the relationship between each index on a count basis. In other words, each stock — regardless of price or market cap — is given an equal visual weight. The S&P (500 stocks strong) occupies about 17 times as much space as the 30-stock Dow Jones. And, yes, every stock in the Dow Jones is also in the S&P 500. There are three stocks — Microsoft (MSFT), Cisco (CSCO), and Intel (INTC) - that appear in all three indices.

For the lefthand diagram, stocks are weighted by market capitalization. Even though the Dow Jones only has 30 stocks, it still has a combined market cap of about $4.1 trillion, which is not too far from the $5.1 trillion market cap of the 2,717 stocks in the NASDAQ index. The S&P 500 is much larger — $13.4 trillion — and represents about 75% of the total market capitalization of listed companies in the United States.

The Dow is criticized as an indicator of stock market health for at least two reasons. First, because it is price-weighted rather than market cap-weighted (entertaining plain English explanation here). Second, because of the Venn diagrams above: the Dow represents a very small number of stocks, and less than a third of the market cap in the United States.