High-flying internet company Google and 11 other companies were added on Monday to the Nasdaq 100, the Nasdaq Stock Market’s index of the 100 largest non-financial companies listed on the market.
The Nasdaq 100 is a widely used benchmark for a variety of mutual funds and exchange-traded funds. The Nasdaq 100 Index Tracking Stock, better known as the QQQ, is one of the most popular index-linked stocks in the world and is a component of hundreds of mutual funds and pension funds. The trust that runs QQQ has more than $20-billion under management.
Google, which went public in August last year and now has a market capitalisation of $128,3-billion, was widely expected to join the Nasdaq 100 after seeing its stock price more than quadruple over the past 16 months.
The other 11 companies included in the index on Monday were NII Holdings, Expedia, Patterson-UTI Energy, NVIDIA, Urban Outfitters, Cadence Design Systems, Activision, RedHat, Monster Worldwide, CheckFree and Discovery Holding Company.
To make room for the newcomers, the Nasdaq 100 is removing 12 other companies that have fallen out of the top 100 non-financial companies listed on the Nasdaq. Those companies are Career Education, Dollar Tree Stores, Intersil, Invitrogen, Level 3 Communications, Millennium Pharmaceuticals, Molex, Novellus Systems, QLogic, Sanmina-SCI, Synopsys and Smurfit-Stone Container.
Inclusion within the Nasdaq 100 is considered a boon to the new companies’ stock prices, as the Nasdaq 100 trust and other funds that use the index as a benchmark are quick to buy up the newcomers for their portfolios. Likewise, those companies jettisoned from the index often see their stock prices fall. — Sapa-AP