Nasdaq Composite Ends Above 5000 for First Time Since Dot-Com Era

 The Wall Street Journal


The Nasdaq Composite climbed above the 5000-point level for the first time in almost 15 years, another milestone in the revival of an index that once was synonymous with dot-com excess but now reflects a broad swath of global technology, consumer, health-care and financial firms.

The Nasdaq Composite, which tracks the prices of the 2,569 companies on the Nasdaq Stock Market, rose 44.57 points, or 0.9%, to 5008.10. 

The Nasdaq spent Monday morning creeping higher, crossing 5000 just after 10:30 a.m. EST, marking the first time the index has traded at that level since March 27, 2000. It spent the rest of the session drifting backward, until a rally during the last hour of trading propelled it to close above 5000.

The finish above 5000 was noteworthy in that it is rare for major indexes to settle above a new “millennium” marker on the first attempt. Instead, they typically test those levels during the trading day before closing above them a few days later. Even in the heady days of March 2000, the Nasdaq bounced around 5000 for a few days before finally closing above it.

The rebound of the Nasdaq underscores the renewed ascendancy of U.S. financial markets following the dot-com crash of 2000 and the financial crisis of 2008. While the Nasdaq is yet to reach its closing record of 5048.62. set in 2000, the Dow industrials and the S&P 500 index each have set several dozen new highs over the past few years, driven by a growing U.S. economy, healthy corporate profits and exceptionally low interest rates in the U.S.

The Nasdaq’s march back up to 5000 has been slow but steady, driven by growth in earnings and dividend payments of its companies. Although the index’s rise is nowhere near as rapid as it was in 2000, its gains are viewed as likely less ephemeral and bearing less risk for shareholders. Nasdaq companies collectively fetched 189.75 times their earnings over the previous year in March 2000, according to Nasdaq—versus 31.96 today.