5 Best Performing Nasdaq Stocks Of 2015

In the countdown to 2016, U.S. stocks look to end a lackluster year on a disappointing note. Several factors added to the woes, including sluggish global economic growth, currency devaluation in China, low commodity prices and continued strength in the dollar. While the plunge in oil prices decimated energy companies and adversely affected junk bonds, the surge in the dollar had a negative impact on U.S. multinationals’ overseas sales figures.

The U.S. dollar surprisingly gained more than 10% this year, on top of a 12% gain last year, even though the Fed raised interest rates for the first time in a decade.

In the case of interest rates, investors initially liked the idea of ultra-low interest rates as they aided economic recovery, lending a bull run to the markets. However, repeated procrastinations led investors to believe that the Fed lacked confidence in U.S. economic growth, leading to a decline in stocks.

Investors had expected a rate hike as early as the first quarter of 2015, but it did not come until the December meeting. Meanwhile, the market experienced a 12% correction during the August-September period when China devalued its currency, which eventually dented investor sentiment. Additionally, geo-political concerns in regions like Yemen, Ukraine and Syria added to the bearish sentiment.

The Dow Jones Industrial Average’s (DJI) year-to-date return has fallen 1.5%, and the S&P 500 (INX) is more or less on track to end flat. However, the Nasdaq has a spring in its step, with the tech-laden index having gained 6.6% so far in 2015. In the past several years, the Nasdaq has outperformed other major indexes, but this time results have been even more convincing.

Strong gains from a few supernova stocks, including Amazon.com, Inc. (AMZN - Analyst Report), Netflix, Inc. (NFLX - Analyst Report) and Alphabet Inc. GOOGL boosted the Nasdaq. While shares of Netflix are up 140% this year, Amazon’s shares have more than doubled. Moreover, limited exposure to the beleaguered energy sector has helped the index to settle in positive territory.

Going forward, as long as oil prices remain near multi-year lows, the Nasdaq may outperform other broad-based indexes. The end of the year Santa rally is also expected to lift the index further. Since 1971, the Nasdaq witnessed a gain of more than 80% during the last five trading days of the year, for an average yearly gain of about 1.3%.

However, the Nasdaq was not immune to its share of setbacks this year. The big decline in biotech stocks dragged the index almost 13% in August from its late July high. In September, Hillary Clinton’s plan to prevent “price gouging” for specialty drugs also limited biotech’s advances. Nevertheless, the fundamental strength of the biotech sector won out in the end, eventually having a positive impact on the Nasdaq. In fact, the index remained above the key psychological level of 5,000 this year.

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