NASDAQ Pushed Above 5,000 By Surging Technology StocksBy James Bernstein
NEWSDAY -- It took the NASDAQ almost a quarter of a century to top the 1,000 level, but a mere 10 weeks to race from 4,000 to 5,000 -- the mark it crossed Thursday in yet another sign that technology has become king on Wall Street.
The NASDAQ composite index, which has been the hottest index in U.S. history, rose 149.69 points, or 3.1 percent, to 5,046.86, after crossing the 5,000 mark during trading Tuesday before falling off.
“There’s lots of money pouring into the market, and half of it is going into technology stocks,” said Charles Payne, head of trading at Wall Street Strategies. The NASDAQ is heavy with technology stocks, including bellwethers Microsoft Corp. and Intel Corp.
The gap between the NASDAQ and the Dow Jones industrial average is beginning to look like a gulf. So far this year, the NASDAQ is up about 24 percent. The Dow, which has been depressed, is down about 13 percent. For all of 1999, the NASDAQ was up a stunning 86 percent.
Thursday, the Dow, composed of 30 blue-chip stocks that many say represent the “Old Economy,” also had an upbeat day, rising 154.20 points, or 1.6 percent, to 10,010.73. The broader Standard & Poor’s 500 index gained 34.99, or 2.6 percent, to 1,401.69.
But those gains were overshadowed by the accomplishment of the NASDAQ, which was created Feb. 8, 1971, and set at 100 by the National Association of Securities Dealers, an industry self-regulating group. The number was set as a gauge of performance in the computerized market for smaller and faster-growing companies.
NASDAQ 5000 comes two days after the Dow plummeted 374 points, prompting investors to conclude that the tech-heavy NASDAQ was the place to be, analysts said.
Despite the NASDAQ’s performance, the market has been uneven, and is expected to remain so until two events play out: the Federal Reserve Board is to meet March 21 to decide whether to again raise short-term interest rates.
On March 27, OPEC is expected to meet to discuss oil prices. The Fed is widely expected to raise rates again to cool what it sees as a too-hot economy. Still, NASDAQ stocks have risen despite interest rate hikes.