NASDAQ Composite
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The Nasdaq Composite (
ticker symbol A ticker symbol or stock symbol is an abbreviation used to uniquely identify publicly traded shares of a particular stock on a particular stock market. In short, ticker symbols are arrangements of symbols or characters (generally Latin letters ...
^IXIC) is a
stock market index In finance, a stock index, or stock market index, is an index that measures a stock market, or a subset of the stock market, that helps investors compare current stock price levels with past prices to calculate market performance. Two of the ...
that includes almost all stocks listed on the
Nasdaq The Nasdaq Stock Market () (National Association of Securities Dealers Automated Quotations Stock Market) is an American stock exchange based in New York City. It is the most active stock trading venue in the US by volume, and ranked second ...
stock exchange A stock exchange, securities exchange, or bourse is an exchange where stockbrokers and traders can buy and sell securities, such as shares of stock, bonds and other financial instruments. Stock exchanges may also provide facilities for th ...
. Along with the
Dow Jones Industrial Average The Dow Jones Industrial Average (DJIA), Dow Jones, or simply the Dow (), is a stock market index of 30 prominent companies listed on stock exchanges in the United States. The DJIA is one of the oldest and most commonly followed equity inde ...
and
S&P 500 The Standard and Poor's 500, or simply the S&P 500, is a stock market index tracking the stock performance of 500 large companies listed on stock exchanges in the United States. It is one of the most commonly followed equity indices. As of D ...
, it is one of the three most-followed stock market indices in the United States. The composition of the NASDAQ Composite is heavily weighted towards companies in the
information technology Information technology (IT) is the use of computers to create, process, store, retrieve, and exchange all kinds of data . and information. IT forms part of information and communications technology (ICT). An information technology system (I ...
sector. The
Nasdaq-100 The Nasdaq-100 (^NDX) is a stock market index made up of 101 equity securities issued by 100 of the largest non-financial companies listed on the Nasdaq stock exchange. It is a modified capitalization-weighted index. The stocks' weights in the in ...
, which includes 100 of the largest non-financial companies in the Nasdaq Composite, accounts for over 90% of the movement of the Nasdaq Composite. The Nasdaq Composite is a
capitalization-weighted index A capitalization-weighted (or cap-weighted) index, also called a market-value-weighted index is a stock market index whose components are weighted according to the total market value of their outstanding shares. Every day an individual stock's ...
; its price is calculated by taking the sum of the products of closing price and index share of all of the securities in the index. The sum is then divided by a divisor which reduces the
order of magnitude An order of magnitude is an approximation of the logarithm of a value relative to some contextually understood reference value, usually 10, interpreted as the base of the logarithm and the representative of values of magnitude one. Logarithmic dis ...
of the result.


Investing in the Nasdaq Composite

Index fund An index fund (also index tracker) is a mutual fund or exchange-traded fund (ETF) designed to follow certain preset rules so that the fund can a specified basket of underlying investments.Reasonable Investor(s), Boston University Law Review, avail ...
s that attempt to track the Nasdaq Composite include
Fidelity Investments Fidelity Investments, commonly referred to as Fidelity, earlier as Fidelity Management & Research or FMR, is an American multinational financial services corporation based in Boston, Massachusetts. The company was established in 1946 and is on ...
' FNCMX
mutual fund A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities. The term is typically used in the United States, Canada, and India, while similar structures across the globe include the SICAV i ...
and ONEQ
exchange-traded fund An exchange-traded fund (ETF) is a type of investment fund and exchange-traded product, i.e. they are traded on stock exchanges. ETFs are similar in many ways to mutual funds, except that ETFs are bought and sold from other owners throughout the ...
.
Invesco Invesco Ltd. is an American independent investment management company that is headquartered in Atlanta, Georgia, with additional branch offices in 20 countries. Its common stock is a constituent of the S&P 500 and trades on the New York stock exc ...
offers the
exchange-traded fund An exchange-traded fund (ETF) is a type of investment fund and exchange-traded product, i.e. they are traded on stock exchanges. ETFs are similar in many ways to mutual funds, except that ETFs are bought and sold from other owners throughout the ...
, which matches the performance of the
Nasdaq-100 The Nasdaq-100 (^NDX) is a stock market index made up of 101 equity securities issued by 100 of the largest non-financial companies listed on the Nasdaq stock exchange. It is a modified capitalization-weighted index. The stocks' weights in the in ...
, a different index which tracks 101 of the largest non-financial companies in the Nasdaq Composite and is 90% correlated with the Nasdaq Composite.


Selection criteria

To be eligible for inclusion in the Nasdaq Composite, a security's U.S. listing must be exclusively on the Nasdaq stock market unless the security was dually listed on another U.S. market prior to 2004 and has continuously maintained such listing, and must be one of the following security types: *
American depositary receipt An American depositary receipt (ADR, and sometimes spelled ''depository'') is a negotiable security that represents securities of a foreign company and allows that company's shares to trade in the U.S. financial markets. Shares of many non-U.S ...
s (ADRs) *
Common stock Common stock is a form of corporate equity ownership, a type of security. The terms voting share and ordinary share are also used frequently outside of the United States. They are known as equity shares or ordinary shares in the UK and other Com ...
/ ordinary shares *
Limited partnership A limited partnership (LP) is a form of partnership similar to a general partnership except that while a general partnership must have at least two general partners (GPs), a limited partnership must have at least one GP and at least one limited ...
interests *
Real estate investment trust A real estate investment trust (REIT) is a company that owns, and in most cases operates, income-producing real estate. REITs own many types of commercial real estate, including office and apartment buildings, warehouses, hospitals, shopping cente ...
s (REITs) * Shares of beneficial interest (SBIs) *
Tracking stock Tracking stock, also known as letter stock and targeted stock, is a specialized equity offering issued by a company that is based on the operations of a defined business within the larger organization (such as, for instance, a wholly owned subsi ...
s
Closed-end fund A closed-end fund (CEF) is a fund that raises capital by issuing a fixed number of shares which are not redeemable, and then invest that capital in financial assets such as stocks and bonds. Unlike open-end funds, new shares in a closed-end fund ...
s,
convertible bond In finance, a convertible bond or convertible note or convertible debt (or a convertible debenture if it has a maturity of greater than 10 years) is a type of bond that the holder can convert into a specified number of shares of common stock in ...
s,
exchange-traded fund An exchange-traded fund (ETF) is a type of investment fund and exchange-traded product, i.e. they are traded on stock exchanges. ETFs are similar in many ways to mutual funds, except that ETFs are bought and sold from other owners throughout the ...
s,
preferred stock Preferred stock (also called preferred shares, preference shares, or simply preferreds) is a component of share capital that may have any combination of features not possessed by common stock, including properties of both an equity and a debt ins ...
s, rights, warrants, units and other
derivative In mathematics, the derivative of a function of a real variable measures the sensitivity to change of the function value (output value) with respect to a change in its argument (input value). Derivatives are a fundamental tool of calculus. F ...
s are not included in the index. If at any time a component security no longer meets the required criteria, the security is removed from the index.


Performance


Price history & milestones

The index was launched in 1971, with a starting value of 100. On July 17, 1995, the index closed above 1,000 for the first time. Between 1995 and 2000, the peak of the
dot-com bubble The dot-com bubble (dot-com boom, tech bubble, or the Internet bubble) was a stock market bubble in the late 1990s, a period of massive growth in the use and adoption of the Internet. Between 1995 and its peak in March 2000, the Nasdaq Compo ...
, the Nasdaq Composite stock market index rose 400%. It reached a price–earnings ratio of 200, dwarfing the peak price–earnings ratio of 80 for the Japanese
Nikkei 225 The Nikkei 225, or , more commonly called the ''Nikkei'' or the ''Nikkei index'' (), is a stock market index for the Tokyo Stock Exchange (TSE). It has been calculated daily by the '' Nihon Keizai Shimbun'' (''The Nikkei'') newspaper since 1950 ...
during the
Japanese asset price bubble The was an economic bubble in Japan from 1986 to 1991 in which real estate and stock market prices were greatly inflated. In early 1992, this price bubble burst and Japan's economy stagnated. The bubble was characterized by rapid acceleration ...
of 1991. In 1999, shares of
Qualcomm Qualcomm () is an American multinational corporation headquartered in San Diego, California, and incorporated in Delaware. It creates semiconductors, software, and services related to wireless technology. It owns patents critical to the 5G, 4 ...
rose in value by 2,619%, 12 other large-cap stocks each rose over 1,000% in value, and seven additional large-cap stocks each rose over 900% in value. Even though the Nasdaq Composite rose 85.6% and the
S&P 500 Index The Standard and Poor's 500, or simply the S&P 500, is a stock market index tracking the stock performance of 500 large companies listed on stock exchanges in the United States. It is one of the most commonly followed equity indices. As of D ...
rose 19.5% in 1999, more stocks fell in value than rose in value as investors sold stocks in slower growing companies to invest in Internet stocks. On March 10, 2000, the index peaked at 5,132.52, but fell 78% from its peak by October 2002. The index declined to half its value within a year, and finally hit the bottom of the bear
market trend A market trend is a perceived tendency of financial markets to move in a particular direction over time. Analysts classify these trends as ''secular'' for long time-frames, ''primary'' for medium time-frames, and ''secondary'' for short time-fram ...
on October 10, 2002, with an intra-day low of 1,108.49. It remained down at least 50% until May 2007. The index closed above 2,800 on October 9, 2007, and reached an intra-day level of 2,861.51 on October 31, 2007, the highest point reached on the index since January 24, 2001, before falling in the United States bear market of 2007–2009. By February 6, 2008, the index was trading below 2,300. On September 15, 2008,
bankruptcy of Lehman Brothers The bankruptcy of Lehman Brothers on September 15, 2008, was the climax of the subprime mortgage crisis. After the financial services firm was notified of a pending credit downgrade due to its heavy position in subprime mortgages, the Federal ...
led to a 3.6% drop in the index, its worst single-session percentage decline since March 24, 2003. On September 29, 2008, the index fell nearly 200 points or 9.14% to fall beneath 2,000. Conversely, on October 13, 2008, the index gained nearly 200 points, more than 11%. On March 9, 2009, the index reached a six-year intra-day low of 1,265.52. The index closed 2012 at 3,019.51. On November 26, 2013, the index closed above 4,000 for the first time since September 7, 2000. Although it still stood almost 20% below its all-time highs, the index set a new record annual close of 4,176.59 on December 31, 2013. On March 2, 2015, the index closed above 5,000 for the first time since March 9, 2000. On April 23, 2015, the index set a new record closing high for the first time in 15 years, though it was still just short of the all-time intraday high set in 2000. On January 2, 2018, the index crossed 7,000 intraday. By December 24, 2018, the index had plunged to its yearly low at 6,192. In 2019, the index rose 35.2%, closing for the year at 8,972.60 points. During the
2020 stock market crash On 20 February 2020, stock markets across the world suddenly crashed after growing instability due to the COVID-19 pandemic. It ended on 7 April 2020. Beginning on 13 May 2019, the yield curve on U.S. Treasury securities inverted, and rema ...
, on March 23, 2020, the index hit a low of 6,860. However, on June 9, 2020, the index traded above 10,000 for the first time. On August 6, 2020, the index reached a new all-time high above 11,000 and managed to close for the year at 12,888 points. In 2021, the index reached the milestones of closing above 13,000 and 14,000 in January and February respectively, and in November it closed above 16,000 for the first time. In 2022, the index plunged through the beginning of the year with it reaching an intraday low on June 16 at 10,565.14. It closed the first half of the year down 29.74%, the worst first half of the year in its history.


Returns by year


References


External links

{{North and South American Stock market indices
Composite Composite or compositing may refer to: Materials * Composite material, a material that is made from several different substances ** Metal matrix composite, composed of metal and other parts ** Cermet, a composite of ceramic and metallic materials ...
American stock market indices