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Finance Dictionary and Glossary of Investment Terms
Nasdaq Composite Index
A market-value weighted index of all common stocks listed on Nasdaq. The Nasdaq Composite dates back to 1971, which is when the Nasdaq exchange was first formalized. The index is used mainly to track technology stocks, and thus it is not a good indicator of the market as a whole. Unlike the Dow Jones Industrial Average (DJIA), the Nasdaq is market value-weighted, so it takes into account the total market capitalization of the companies it tracks and not just their share prices.
An index of stocks traded on Nasdaq. This widely followed index of all Nasdaq stocks is used as a handy barometer of the performance of smaller companies, although the success of Nasdaq and its listed firms has meant that the index includes such big players as Microsoft. Also, the Nasdaq index is not an industry-neutral index; it is disproportionately tech-heavy.