Stock price and trading?

I was wondering what determines the day in day out price of a stock traded on a stock market and what implications does this have for the company? Are the stocks that are traded every day on NYSE and NASDAQ primary stock (issued directly from the firm) or secondary stock (traded between investors)? For example, if I wanted to buy some Disney stock and went on etrade to buy them would I be purchasing stock from the company or from another investor who is selling their stock in Disney?

Public Comments

1. The price fluctuations in a stock are based on the perceived value traders have of the company. If traders believe the company is good, they will purchase the stock. If there are more buyers of a stock (demand) than sellers (supply) the price will rise. The opposite is also true if traders believe the company is not doing well.

The implications this has for the company are how much the company is valued at, and also how the company is doing. If the stock has been steadily going up, then the idea is that the company is doing better and better.

When you purchase a stock from your brokerage you are purchasing stock from the secondary market (not directly from the company).