Page 3: Market dirversity
Nasdaq is well known for dealing in high-tech shares and many famous technology companies are listed on the market (eg Apple, Dell, Microsoft, Cisco, Intel). However, Nasdaq also deals in shares of companies from a broad range of market sectors, for example, the retail warehouse chain Costco and Starbucks coffee shop chain. In number, there are indeed many more manufacturing and finance companies listed, see pie chart.
Many associate Nasdaq with dynamic sectors of the US and world economies. Financial experts and economists carefully monitor changes in the Nasdaq Composite Index because they feel it gives a good indication of the present and future state of the US economy. Companies listed on Nasdaq are divided into two groups, based on their market capitalisation:
- The Nasdaq National Market comprises large companies with high levels of capital.
- The Nasdaq SmallCap Market comprises small and medium-sized companies.
The Nasdaq-100 Index®
To be included in the Nasdaq-100 Index a business must have:
- a minimum average daily trading volume of 100,000 shares
- been listed for at least two years
- a market capitalisation of at least $10 billion.
For foreign shares to be included, the company needs to have:
- a worldwide market of at least $10bn
- a US market value of at least $4bn
- and an average trading volume of at least 200,000 shares per day.
The Nasdaq Stock Market was originally owned and operated by the National Association of Securities Dealers (NASD®). NASD is a self-regulatory securities industry group to which every US broker and dealer must belong. Nasdaq is moving to become a separate entity from the NASD by mid 2002. As of January 2001, strategic investors own 60% and NASD only owns 40%.