Nasdaq 100 to Rebalance, Add Health-Care Issues

Health-care stocks will become more of a force in the Nasdaq 100 when the benchmark index--often considered a proxy for the technology sector--is shuffled next week.

Of the 13 stocks to be added to the index next Monday, eight are health-care and biotechnology issues, including ImClone Systems Inc., Sepracor Inc., Invitrogen Corp. and Cephalon Inc.

All 13 of the stocks to be dropped during the index’s annual rebalancing are technology issues--some of them household names of the ‘90s dot-com boom such as Inktomi Corp., Ariba Inc. and CNet Networks Inc.

The names were released by the Nasdaq Stock Market on Monday. The index comprises the 100 largest non-financial Nasdaq stocks, ranked principally by market capitalization (stock price multiplied by number of shares outstanding).

The Nasdaq 100 lost much of its popularity among investors after the tech bubble burst last year. However, the Nasdaq 100 Trust (ticker symbol: QQQ), a so-called exchange-traded fund, still is regularly one of the most actively traded securities.

Stocks that move in and out of the index may experience some strong buying and selling pressure leading up to the rebalancing on Monday. Mutual funds that attempt to mimic the Nasdaq 100 will sell the stocks leaving the index and buy those that are added.

Monday, some stocks added to the index rose, including Protein Design Labs Inc., up 98 cents to $33.15; Synopsys Inc., up $1.20 to $56.17; and Express Scripts Inc., up $1.90 to $44.80. ImClone, however, fell $1.39 to $68.61.

Among stocks leaving the index, Level 3 Communications Inc. lost 17 cents to $5.60 and Ariba fell 70 cents to $5.22, while Novell gained 19 cents to $4.67 and CNET rose 16 cents to $7.18.

Also Monday, the Wall Street Journal reported that Nasdaq in 2002 plans to offer an exchange-traded fund that would mimic the performance of the Nasdaq composite index, which tracks all 4,000-some Nasdaq-listed shares.

Briefly

Santa Barbara-based investment management company Starbuck, Tisdale & Associates said Monday that it agreed to be acquired by San Francisco-based First Republic Bank. Starbuck Tisdale manages about $1 billion for clients. First Republic will pay $13 million in cash and stock upfront and make additional payments over seven years, the companies said.

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Changes in the Nasdaq 100

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