The above is a time series plot of DJIA plotted on the first of every month for the last 3 years(Jan 98 – Dec 01)

From the chart for closing values we can see that there had been an upward trend for the last 4 years however there have been a few dips for example in Aug 98 and Sep 01. The dip in Sep 01 could be attributed to various factors such as the events of Sep 11, the downturn in economy and so on.

A similar time series plot of Nasdaq is plotted above. It can be observed that the general trend is similar for both the indexes. The Nasdaq had reached a peak in Mar/Apr 00 when the technology boom was at its peak. An important observation in case of Nasdaq is that the percentage drop from its peak to the current is considerably higher.

It can also be seen that the volatility of both the Dow and Nasdaq has increased since Jan of 2000.

It can be observed that the volume of shares traded on Nasdaq has been consistently higher than that of the Dow for the last 4 years. It can also be seen that since Dec 99 this gap has consistently widened which could probably be attributed to the greater fluctuations of the Nasdaq in terms of percentage points.