After reaching a high in March 2000, the Nasdaq tumbled nearly 80 percent to a low of 1,139.90 in October 2002 and didn’t regain its prior peak for 15 years. In June, Nasdaq announced an agreement for a $10.5 billion acquisition for Adenza, a developer of risk management and trade processing software for banks and brokers. This deal highlights NDAQ’s strategy to diversify the business beyond marketplaces and focus more on selling technology solutions. The Nasdaq Stock Market’s market value tops $22 trillion, and over half of this comes from tech stocks. Consumer services stocks make up roughly 19%, while and healthcare comes in around 8%.
What are stock market indexes?
Together, that data forms a picture that helps investors compare current price levels with past prices to calculate market performance. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation. Companies on the Nasdaq Capital Market are focused on raising capital and are therefore typically younger than other companies, with less liquidity and revenue. That said, they must meet equity, market value or net income standards, have at least 1,000,000 publicly traded shares and trade for at least $4, again with certain exceptions.
The Nasdaq Composite tracks the vast majority of the stocks listed on the Nasdaq Stock Market. It has outperformed the broader S&P 500 on an average annual return basis over the past 10 years (16% vs 13%). The Nasdaq Composite Index measures all Nasdaq domestic and international based common type stocks listed on The Nasdaq Stock Market. However, the Nasdaq is especially sensitive to tech stock dips and has experienced serious declines because of that, most notably when the dotcom bubble burst.
Nasdaq Listing Requirements
Weighting limits the influence of the largest companies and balances the index among The Wisdom of Finance all members. The easiest way to invest in companies in the Nasdaq Composite is through index mutual funds and ETFs, both of which seek to emulate the performance of particular indexes. While its heavy tech weighting is responsible for much of its current outsize returns, it’s also led to similarly disproportionate drops. The 2008 recession and dot-com bubble, for example, caused the Nasdaq Composite to plummet as technology companies shut their doors.
- The NASDAQ promotes this growth by driving competition in the stock market.
- For the average investor, ETFs are generally the simplest and least risky means of gaining exposure to the companies in the index.
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- Gordon Scott has been an active investor and technical analyst or 20+ years.
- The exchange operates 29 markets enabling the trading of stocks, derivatives, fixed income, and commodities in the U.S., Canada, Scandinavia, and the Baltics.
S&P 500 Index
Typically, when an investor says “the Nasdaq,” they’re referring to the Nasdaq Composite, or IXIC. This is an index that tracks the performance of the Nasdaq Stock Market, an electronic platform used to buy and sell securities. And the How to buy emax crypto Nasdaq Stock Market is run by financial services firm Nasdaq (NDAQ).
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more – straight to your e-mail. The Nasdaq Composite is one of the most widely followed indexes on Wall Street, and is used to measure the performance of the stock market. From another angle, the S&P 500, as an index, is a statistical measure of the performance of America’s 500 largest stocks. In this context, the S&P 500 is a common benchmark against which portfolio performance can be evaluated. However, it is often the least understood of the major indexes in terms of composition and how it works. Today, all-electronic trading has become the norm, and very few securities exchanges still maintain a physical trading floor of any kind.
The Stock Market Just Crossed a Threshold It’s Never Reached Before — and History Is Quite Clear What Happens Next
All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Finance Strategists has an advertising relationship with some of the companies included on this website. We may earn a commission when you click on a link or make a purchase through the links on our site. All of our content is based on objective analysis, and the opinions are our axi review own. The NASDAQ promotes this growth by driving competition in the stock market.