What makes stock prices change?

Your daily newspaper reports that IMB shares are up $2.25. The TV news states that Nike is down 3%. What caused these changes?

The answer is relatively simple. Share prices, like other goods in a market economy, are determined by supply and demand. The less of a particular product that is available to the public and the more that the public demands it, the higher the price for that product. The inverse of this statement is also true.

Share prices are determined by the buyers and sellers. When owners of shares are unwilling to sell shares at a given price, and the demand for these shares continues with prospective buyers, the share price will rise until it reaches a point that entices some owners to sell their shares. This price is considered the "fair market value" for a particular share since both buyers and sellers are happy to make a transaction at this point.

What makes stock prices change? Prices change according to the market laws of supply and demand as determined by the buyers and sellers. A price is established that is considered "fair market value" for a particular share at a particular time.