Nasdaq drops more tech stocks
By Amy Baldwin
Associated Press
NEW YORK — It's a sign of bearish times: As the Nasdaq Stock Market did its annual reshuffling of the Nasdaq-100 Index yesterday, technology issues got the boot in favor of safer consumer and industrial companies.
Associated Press library photo
"Too much tech got in there, and so naturally some has to come out," said Scott Bleier, president of Hybridinvestors.com, a research advisory service.
The New York Stock Exchange was frenzied on the first trading day of 2001. The Nasdaq-100 Index, which was weighted toward technology stocks, continued to shift toward safer issues in its annual reshuffling yesterday.
The Nasdaq announced late yesterday it was removing 15 companies from the index, 12 of them technology companies. They were replaced primarily with companies in the consumer, healthcare and industrial sectors.
The changes take place when the market opens Dec. 23.
Among issues leaving the index: chip makers Vitesse Semiconductor Inc. and PMC-Sierra, troubled biotech ImClone Systems Inc., and software maker Rational Software Corp.
Stocks being added to the index include retailers Ross Stores Inc. and PetsMart Inc., Fastenal Co., an industrial company, and First Health Group Corp. A complete list of additions and deletions can be found on Nasdaq's Web site, at www.nasdaqnews.com.
Analysts had expected Nasdaq to drop tech issues in favor of more old-economy companies, given the steep declines tech has endured throughout the bear market. Since peaking in 2000, the technology sector's presence in the index has been falling along with tech stock prices.
"Literally, in the index, the weight of technology has declined," said Nicholas Gulden, an analyst with Salomon Smith Barney.
Stock indexes are often reconfigured annually to keep pace with changes in the market. In this case, the Nasdaq-100 tracks the largest nonfinancial companies that trade on the Nasdaq Stock Market.
"You want to re-rank your index periodically so that it continues to fulfill its mission. The Nasdaq-100 is the index of the largest 100 non-financial issues on Nasdaq," said John L. Jacobs, president of Nasdaq Investment Product Services.
The Nasdaq-100 closed yesterday at 1,005.85, down more than 75 percent from its 2000 high.
The Nasdaq-100 tracks some of the biggest names in technology, including Microsoft Corp., Intel Corp. and Cisco Systems Inc. It also is the basis for the exchange-traded fund known as the Triple Q or the Qubes because of its ticker symbol, QQQ.
With $20 billion in assets, the Triple Q is the mostly actively traded U.S. equity issue, with daily volume surpassing 90 million this year.
