No, it doesn't. And it doesn't match any P/E chart - for any period of time it covers - that I've seen. What is the methodology of those numbers? Without knowing that, I'll put this one in the discard pile.
One of the latest estimates of 2010 earnings for the S&P500 that I've read is $73. So take your multiple times the $73. Using 16 for instance gives you 1168 on the S&P500. OldTrader
This is where I think we're in trouble, because those estimates are everyone's best guess of what 'new normal' earnings are going to look like. Consumers are still losing jobs, houses, and net worth. He is on his back for the foreseeable future - a condition unprecedented in the lifespan of almost every forecaster. Plus, it is just bad form to be too negative right now ... We are in for a wave of serious earnings disappointments in the not-to-distant future I'm afraid.
I took 600 of the most liquid stocks, and found that the average Earnings TTM was 1.39 / share, and the average price was $41. I don't see who that equates to a P/E ratio of 120
It's reasonable to expect a different result since your "index" components and calculation methodology are not the same as the S&P 500. At June 30th, the S&P 500 had P = 919.32 and E = 7.74, producing a PE = 119.
Trailing as was pointed out is irrelevant. Forward earnings are substantially higher than this. A better metric might be historical price to book value ratios. Book value's have been below 1 for several months up until the end of may, and are usually 50% over 1.
My previous post was intended to simply talk about the calculation, rather than comment on relevance; nonetheless, I agree the current PE -- while interesting -- probably lacks significant meaning (I prefer a ten-year moving average).