In 1972, NASDAQ stood for National Association of Securities Dealers Automated Quotations. NASDAQ was founded in 1971 by the National Association of Securities Dealers (NASD), which divested itself of NASDAQ in a series of sales in 2000 and 2001. NASDAQ is owned and operated by The NASDAQ OMX Group, the stocks of which were listed on its own stock exchange beginning July 2, 2002, under the ticker symbolNDAQ.
When the NASDAQ began trading on February 8, 1971, it was the world's first electronic stock market. At first, it was merely a quotation system and did not provide a way to perform electronic trades. The NASDAQ helped lower the spread (the difference between the bid price and the ask price of the stock) but was unpopular among brokerages which made much of their money on the spread.
The NASDAQ-100 (^NDX) is a stock market index made up of 107 equity securities issued by 100 of the largest non-financial companies listed on the NASDAQ. It is a modified capitalization-weighted index. The stocks' weights in the index are based on their market capitalizations, with certain rules capping the influence of the largest components. It is based on exchange, and it is not an index of U.S.-based companies. It does not have any financial companies, since these were put in a separate index. Both of those criteria differentiate it from the Dow Jones Industrial Average, and the exclusion of financial companies distinguishes it from the S&P 500.
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