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The biggest stocks in the Nasdaq make up the Nasdaq 100 – a stock market index comprising the largest non-financial companies listed on the Nasdaq Stock Market.
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Launched in January 1985, the Nasdaq 100 (Index Nasdaq: NDX) is not to be confused with the Nasdaq Composite Index (frequently referred to as simply "the Nasdaq"), which includes all of the more than 3,000 companies listed on the Nasdaq exchange.
The Nasdaq 100 is a modified capitalization-weighted index, meaning stocks' weights in the index are based on their market cap (or value), with certain rules capping the influence of the largest components to allow for more diversification. And, there are actually 101 stocks in the index thanks to Google Inc.'s (Nasdaq: GOOG, GOOGL) dual class listing.
A major rebalancing of the Nasdaq 100 took place in May 2011 to bring it closer to market cap weighting. The index continues to be rebalanced when one company is worth more than 25% of the index and when companies with a weighting of at least 4.5% constitute 48% of the index.
To accomplish this, the Nasdaq Stock Market reviews the composition of the Nasdaq 100 Index on a quarterly basis and adjusts the weightings of the index components using a proprietary algorithm if certain pre-established weight distribution requirements are not met.
The Nasdaq 100's lack of financial companies makes it unique. Another distinction from benchmarks like the Dow Jones Industrial Average is that it includes foreign companies (nine at last count from eight countries). The S&P 500 Index also includes non-U.S. companies.
The foreign entities in the Nasdaq 100 include Avago Technologies Ltd. (Nasdaq: AVGO) from Bermuda; Baidu Inc. (Nasdaq ADR: BIDU) from China; Catamaran Corp. (Nasdaq: CTRX) from Canada; Check Point Software Technologies Inc. (Nasdaq: CHKP) from Israel; Garmin Ltd. (Nasdaq: GRMN) from Switzerland; Liberty Global Plc. (Nasdaq: LBTYA) from the U.K.; NXP Semiconductors NV (Nasdaq: NXPI) from the Netherlands; Seagate Technology Plc. (Nasdaq: STX) from Ireland; and Vodafone Group Plc. (Nasdaq ADR: VOD) from the U.K.
Here's a look at how the Nasdaq 100 is performing in 2014 – as well as which stocks in the index are currently leading the pack…