Shortly after gold was discovered in California in 1849,  all the new settlers in the west created a great demand on companies to expand very quickly.  Our nation was small but growing rapidly  These settlers needed everything from nails and shovels to food and housing.  Companies needed a way to get lots of cash to help them meet the demand.  These companies knew investors would pay them large sums for a share in the profits or part ownership in their company.  So many merchants decided to incorporate and issues stock to raise their needed growth money.  A company might use the money from a stock offering to buy equipment, hire people, or build a factory.  Stocks help companies create jobs for people, make the products we use and provide services we need.

By 1900, millions of dollars worth of stocks were being traded in mines, farm equipment, life insurance, printing, textiles, and railroads -- right out on the street.  The streets got so crowded that some brokers moved their clerks to windows above the street.  The clerks would take customers orders by telephone, then call them down to their brokers.  But this only added to the noise.  One day someone got a bright idea-- hand signals.  They worked just fine in all that noise.  Soon everyone began using them.  Then, so the clerks could find them easily in the crowd, brokers began to wear brightly colored hats and jackets.  Finally in 1921, the curb market finally moved indoors.  Some individuals even bought stocks in such daring new inventions as the horseless carriage and pictures that moved hoping one day to become very rich.  

The early 1900s also saw incredible changes in the United States.  The Industrial Revolution boom had everyone wanting a piece of the profits companies were making.  However people came to realize that big profits could be had by simply selling their shares in a company to other people who saw great value or potential in a company.  This trading became known as the secondary market.  If everyone who bought stock simply kept it and waited to collect dividends, there would be no secondary market.  The main reason for buying stock, however, is speculation.  The secondary market does not affect a company one bit.  However companies greatly affect the secondary market.  If a company announce lay offs or record sales, people either sold their shares or bought more.  To help people make theses purchases a market place was needed where other investors (speculators) could gather.  This is where the NYSE came to help.  

The NYSE was not the only stock exchange.  Even though the NYSE is the biggest and best know stock market, it is not the only one in New York.  The American Stock Exchange is also in New York and sales stocks.  There are stock exchanges in Chicago, Los Angeles, San Francisco, Boston, Philadelphia, and Cincinnati.  Each stock market specializes in a particular area.  The reason the NYSE is so well know and largest is the fact they only trade in the very large and well established companies.  In fact, many companies not deemed good enough to be traded by them were once traded outside on the curb on Wall Street.  That market once called "curb trading" eventually became the American Stock Exchange (AMEX).  Today the NYSE and AMEX along with NASDAQ and hundreds of other exchanges around the globe make up the national and global economy.

Wealthy individuals were the first to catch on to trading stocks.  However what the regular person came to realize was that stocks were a good investment over time and much less expensive than owning land or a house.  Also, what these investors knew was that that their money was being put to good use.  The company shares they purchased today would one day be worth more than what they paid.  A stock is a certificate (simple sheet of paper) stating you own a small fraction of that company (corporation).  When you buy a stock, you are actually paying for a small percentage of everything that the company owns like buildings, chairs, computers, etc.  

Like any good business person, they hoped to buy low and sell high, and thus profit from their investments.  Supply and demand keep prices in check.  If the supply for a stock was high and lots of people were trying to sell it, the price for that stock would drop.  However, if the demand was high and the supply was low the price would rise.  

The selling of stock is done by a stock broker.  They are the people who are authorized to send request to the stock market floor to buy and sell on your behalf.  For their services they are paid a commission.