Tue 11 Jul 2006
Has anyone else noticed the difference lately in the Nasdaq Composite ($IXIC or $COMPQ depending on the source) and the Nasdaq 100 ($NDX – tracked by the ETF QQQQ)?
The composite is making higher lows since mid-June, but the Nasdaq 100 is testing its lows for the year today. The news (CNN, NPR, CNBC, etc.) all seem to quote the composite index instead of the NDX, even though the NDX index is more heavily traded (via NDX options and QQQQ).
In fact, if you chart NDX:COMPQ, you can see this isn’t just since mid-June, the composite index has outperformed the NDX since January of this year. This is in contrast to the relative performance of the DJX:COMPQ (Dow Jones Industrials / Nasdaq Composite) — the Dow (the larger companies) out-performing the Nasdaq stocks. (Incidentally, 3 of the larger components of the NDX are also part of DJX — MSFT, IBM, INTC.)
From nasdaq.com: “The NASDAQ-100 Index includes 100 of the largest domestic and international non-financial securities listed on The NASDAQ Stock Market based on market capitalization.”
Versus, “The NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on The NASDAQ Stock Market.”
Is the difference because of the international components? The financial components?