An index of Philadelphia-area companies has outperformed the Dow Jones industrial average since that widely followed indicator hit its post-dot-com low in October 2002.

But the 222-member Inquirer/Bloomberg Philadelphia index would have done even better if its largest component, GlaxoSmithKline P.L.C., had not held it back.

The local index, which tracks companies with headquarters in the region or a large presence here, has risen at an annual rate of 18.1 percent, compared to a 16.4 percent annualized gain in the Dow stocks.

Investors typically do not choose stocks based on where a company is based, but an index of local stocks is one indicator of a region's economic health. Share prices are a key measure of the paper wealth of thousands of employee stockholders.

In some cases, a company's success leads to significant local job creation. Consider NutriSystem Inc. Shares in the 35-year-old Horsham diet firm, under new ownership since December 2002, have shot up from 60 cents in October 2002 to as much as $75.42 last year. They closed yesterday at $58.24, making them by far the biggest local gainer since then.

Employment at NutriSystem has climbed to 740 from 94 in late 2002, and "all of that growth in employees is here in the Delaware Valley," said Michael J. Hagen, its chairman, president and chief executive officer.

Hagan is among the investors in Philadelphia Media Holdings L.L.C., which owns The Inquirer, the Philadelphia Daily News and Brian Tierney, chief executive of the company, is on NutriSystem's board.

Another big winner is Carpenter Technology Corp., a specialty-materials company in Wyomissing, Pa. Carpenter, whose shares have climbed from $10.26 in October 2002 to $123.65 yesterday, said that this year it was expanding its Reading plant.

"Basic materials are in demand all around the world, and they make them," said Harry Clark of Clark Capital Management in Philadelphia.

DuPont Co., the only company in the Dow and The Inquirer index, lagged both, with an 11 percent annual gain.

GlaxoSmithKline, a British drug company with a U.S. headquarters in Center City, accounts for 22 percent of the local index, which is weighted by market value. That means its 12.9 percent gain damped the overall advance.

Comcast Corp., the second-largest company in the Philadelphia index, pushed in the opposite direction with a gain of about 21.5 percent.