The U.S. stock market encompasses thousands of companies, but those in the S&P 500 make up more than 75 percent of the market's value.

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The big index

Q: What’s the S&P 500?

— H.W., Seattle

A: It’s an index of 500 of America’s biggest companies, as selected by the folks at Standard & Poor’s.

Though the U.S. stock market encompasses thousands of companies, these 500 together make up more than 75 percent of the market’s value.

The companies sport market capitalizations of at least $5 billion, and they include names such as Amazon.com, Anheuser-Busch, Boeing, Campbell Soup, Charles Schwab, Dell, ExxonMobil, FedEx, Ford, General Electric, Google, Harley-Davidson, Halliburton, Heinz, Hershey, Kellogg, Mattel, Merck, Microsoft, Nike, Procter & Gamble, Radio Shack, Southwest Airlines, Starbucks, Target, Whirlpool and Whole Foods Market.

Companies removed from the list in the past year include Circuit City and Hilton Hotels, while those added include The Washington Post Co. and Abercrombie & Fitch.

You can invest in the S&P 500 easily via an index fund such as the low-cost Vanguard 500 Index.

The Motley Fool take

Unilever profits

Consumer-products giant Unilever plc (NYSE: UL) reported a whopping 39 percent increase in earnings per share for its first quarter of 2008.

However, a significant portion of the bottom-line improvement came from selling the Boursin cheese business, along with an extension of a joint venture between its Lipton tea brand and PepsiCo.

Still, underlying sales were up 7.2 percent (adjusted for acquisitions, divestitures and currency effects).

The company increased prices by 4.8 percent, boosting the top line and helping offset commodity-cost head winds that continue to challenge competitors such as Kellogg and General Mills.

Despite the challenging cost environment, Unilever managed to grow operating margins, using a combination of price increases and some expense leverage.

Unilever is in the midst of a multiyear effort to become a faster growth engine — with a focus on developing markets, expanding its personal-care business and creating a leaner operating structure.

It’s not easy to change a 120-year-old company, but Unilever is making steady strides.

While its valuation seems a little high compared with some competitors, the company is delivering solid growth, along with a 2 percent dividend yield. And as long as the U.S. dollar remains weak compared with the euro, investors in Unilever could continue to benefit.

Visit www.fool.com or write The Fool, c/o The Seattle Times, P.O. Box 70, Seattle, WA 98111.