8 February 1971: Nasdaq begins trading

On this day in 1971, America’s “National Association of Securities Dealers Automated Quotations” – or Nasdaq exchange – began trading.

The New York Stock Exchange has been around for a long time it was officially formed in 1792, and is home to many of the world's biggest and most successful companies. For a long time, it was the Big Daddy of American indeed, world stock exchanges. But at the beginning of the 1970s, it found itself with an upstart competitor.

America's National Association of Securities Dealers was a body set up to regulate the OTC market (over the counter' securities which were not traded on traditional stock exchanges).

To enable investors to trade more efficiently, it set up its own speedy and transparent trading system the National Association of Securities Dealers Automated Quotations, or Nasdaq. It began trading on this day in 1971, providing trading for over 2,500 securities. It was a very different beast to the venerable old stock exchanges of yore. It didn't have a big building full of men in silly coats shouting at each other. This was the future this was an electronic exchange.

It expanded rapidly, and soon gained a reputation where tech stocks would list. And while it is very tech heavy, it counts car hire firms, airlines, banks and food companies among its listings.

It trades around two billion shares a day more than any other exchange. Since the millennium it has overseen over a thousand stockmarket flotations. It is the second-largest exchange in the world by market capitalisation. 

Its flagship index, the Nasdaq Composite, began life at 100 in 1971, shot up to over 5,000 before the spectacular dotcom crash of 2000, when it lost some 78% of its value. The enthusiasm of investors for big tech, or "FAANG" stocks, especially since the beginning of the Covi pandemic, has propelled it to ever higher highs. It currently stands at over 13,000.

Recommended

Here’s why markets welcomed America’s big interest rate rise
Stockmarkets

Here’s why markets welcomed America’s big interest rate rise

The US Federal Reserve raised interest rates by half a percentage point – the biggest hike in 20 years. So why did markets rise? John Stepek explains …
5 May 2022
Twitter stock: Elon Musk could be the saviour it needs right now
Tech stocks

Twitter stock: Elon Musk could be the saviour it needs right now

Elon Musk’s offer for Twitter stock looks increasingly like a done deal. The best option for shareholders may be to take the money and run, says Ruper…
25 Apr 2022
Howard Schultz: taking a third shot as Starbucks CEO
People

Howard Schultz: taking a third shot as Starbucks CEO

Howard Schultz turned a small Seattle concern into a global coffee chain. Now he’s back at the helm to revive its fortunes. Can he overcome market sce…
24 Apr 2022
Elon Musk is still trying to buy Twitter – will he succeed and should you care?
Tech stocks

Elon Musk is still trying to buy Twitter – will he succeed and should you care?

Elon Musk has unveiled a $46.5bn financing package to fund his mooted buyout of Twitter. But why is he so keen to buy, and what does he really want w…
22 Apr 2022

Most Popular

Get set for another debt binge as real interest rates fall
UK Economy

Get set for another debt binge as real interest rates fall

Despite the fuss about rising interest rates, they’re falling in real terms. That will blow up a wild bubble, says Matthew Lynn.
15 May 2022
High inflation will fade – here’s why
Inflation

High inflation will fade – here’s why

Many people expect high inflation to persist for a long time. But that might not be true, says Max King. Inflation may fall faster than expected – and…
13 May 2022
What the Ukraine crisis might mean for ESG investing
Advertisement Feature

What the Ukraine crisis might mean for ESG investing

The Ukraine crisis has brought many of the issues around ESG investing into sharper focus. Where does the sector go from here?
3 May 2022