A composite index is an average of all stocks traded on a particular exchange. For example, the NYSE Composite Index is defined thus :
Measures all common stocks listed on the New York Stock Exchange and four subgroup indexes: industrial, transportation, utility and finance. The index tracks the change in the market value of NYSE common stocks, and is adjusted to eliminate the effects of new listings and delistings. The market value of each stock is calculated by multiplying its price per share by the number of shares listed.
The NASDAQ Composite Index is probably the most widely used composite. The DJ Industrials and S&P 500 indices are formulated as representative indices to mark overall market trends.