A total of 13 tech companies are to be dumped from the Nasdaq 100. From 24 December Ariba, BroadVision, CMGI, CNET Networks, 3Com, Inktomi, Level 3 Communications, McLeodUSA, Metromedia Fiber Network, Novell, Palm, Parametric Technology and RealNetworks will no longer appear on the index.
Eight of the 13 replacement companies - ImClone Systems, Sepracor, Invitrogen, Express Scripts, Cephalon, ICOS, Cytyc and Protein Design Labs - are in the category of medicine or life sciences.
The remaining five - Charter Communications, CDW Computer Centers, Symantec, Integrated Device Technology and Synopsys - are tech companies.
The list is made up of the 100 largest non-financial stocks on the Nasdaq Stock Market.
John Jacobs, chief executive officer at Nasdaq Financial Products Services, a subsidiary of Nasdaq, said that the re-ranking was based on a number of objective criteria, with market capitalisation a key factor.
"We re-rank the index every year at this time and it is based on the number of shares outstanding and stock price," he said. "It reflects the current economy."
Companies dropped from the index may rejoin if their performance warrants it. "This year Synopsys and Symantec are rejoining the index," said Jacobs.
The Nasdaq 100 has become a financial benchmark for investors worldwide, and has outperformed every major stock index in the US for the 10-year period beginning December 1991.
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