NASDAQ-100

The NASDAQ-100 (^NDX) is a stock market index made up of 107 equity securities issued by 100 of the largest non-financial companies listed on the NASDAQ. It is a modified capitalization-weighted index. The stocks' weights in the index are based on their market capitalizations, with certain rules capping the influence of the largest components. It is based on exchange, and it is not an index of U.S.-based companies. It does not have any financial companies, since these were put in a separate index. Both of those criteria differentiate it from the Dow Jones Industrial Average, and the exclusion of financial companies distinguishes it from the S&P 500.

History

The NASDAQ-100 began on January 31, 1985 by the NASDAQ, trying to promote itself in the shadow of the New York Stock Exchange. It did so by creating two separate indices: this index, which consists of Industrial, Technology, Retail, Telecommunication, Biotechnology, Health Care, Transportation, Media and Service companies, and the NASDAQ Financial-100, which consists of banking companies, insurance firms, brokerage houses and mortgage companies. By creating these two indices, the NASDAQ hoped that options and futures contracts would be created on them, and mutual funds would adopt them as their benchmarks.