No Wonder This Stock Market Index Outperformed

Wonder This Stock Market Index OutperformedAutomatic Data Processing, Inc. (NASDAQ/ADP) is one of those blue chips that have a good thing going with their private sector U.S. jobs reports. The stock market moves on the news, and so does Automatic Data Processing (ADP). According to ADP’s National Employment Report, the nonfarm private sector added 162,000 jobs from August to September on a seasonally adjusted basis. Manufacturing added 4,000 new jobs, while construction added 10,000, the strongest showing since March (which had a boost in construction jobs due to mild winter weather). The financial services sector added 7,000 jobs in September, representing the 14th consecutive monthly gain. The vast majority of new employment growth was from small and medium-sized businesses.

ADP is another one of those blue chips that is trading right at its 52-week high on the stock market and boasts a current dividend yield of just under three percent. The stock is about nine points away from its all-time high set in September of 2000 and has done well since the financial crisis of 2008/2009 on consistently lower trading volume. ADP’s stock chart is featured below:

Automatic Data Processing Chart

Chart courtesy of

ADP belongs to the NASDAQ-100 Index, which is full of many stock market blue chips, both domestic and international, which are non-financial companies trading on the NASDAQ. Weighted by market capitalization, this index has significantly outperformed all other blue chip averages, including the Dow Jones Industrials, S&P 500, and even the NASDAQ Composite over the last several years.

It’s no wonder this stock market index has outperformed; it’s full of all kinds of growth companies and blue chips that have appreciated tremendously. Below is the stock chart for Alexion Pharmaceuticals, Inc. (NASDAQ/ALXN), which is a favorite of mine. This one-drug powerhouse wealth-creator has been going virtually straight up on the stock market since 2010.

Alexion Pharmaceuticals Chart

Chart courtesy of

Other brand-name blue chips that are in the NASDAQ-100 and hitting new highs on the stock market include Whole Foods Market, Inc. (NASDAQ/WFM), Mattel, Inc. (NASDAQ/MAT), Google Inc. (NASDAQ/GOOG), Apple Inc. (NASDAQ/AAPL) and DIRECTV (NASDAQ/DTV). The weighting by market capitalization is the key here, as some of the stock market’s biggest companies are helping the index outperform.

There are so many blue chips now trading right near their highs that it does make you wonder how long this year’s mini bull market can last. (See “Dow Jones Transportation Index Still Diverging From Broader Market; What It Means.”) Given stock market valuations and current earnings, I’d say we have a little bit further to run before a major correction ensues.