Netscape Shows Nasdaq’s Clout

Despite balky computers, government investigators and other headaches, the Nasdaq Stock Market continues to wield substantial clout, as evidenced by the enormous investor interest in Netscape Communications Corp.

The trading storm unleashed by Netscape, maker of a popular “browser” software for the Internet, underlines the growth in Nasdaq.

Since its creation in 1971, Nasdaq, an electronic stock market that emphasizes technology and biotechnology stocks, has grown larger than the American Stock Exchange and moved closer to the New York Stock Exchange in market size.

Netscape adds to the list of 179 initial public offerings that raised more than $7.24 billion on Nasdaq during the first six months of the year. On the New York Stock Exchange, there were only 22 IPOs, but they raised $6.13 billion, according to Securities Data Co.

While attracting a healthy amount of new business, Nasdaq also is witnessing a surge in trading volume - it hit a record 597.51 million shares on July 19. Earlier that month, the market passed a milestone, reaching a market capitalization of more than $1 trillion.

Yet Nasdaq’s success comes against a list of embarrassments.

The Justice Department and Securities and Exchange Commission last year began an extensive investigation of alleged price fixing by market makers, who trade Nasdaq stocks for their own account as well as for customers. Class action lawsuits were filed by investors against 33 Nasdaq market makers.

The firms strongly denied wrongdoing and convinced a federal judge last week to dismiss the case, although the court permitted investors to refile the case. A Nasdaq-appointed “blue ribbon” committee is reviewing market operations.

Aside from the antitrust investigation, Nasdaq has suffered computer problems during heavy trading.