The Nasdaq Composite Index on Tuesday hit a major milestone: surpassing Nasdaq 6,000, amid a broad-market rally.
The Nasdaq Composite
touched an intraday record of 6,036.02, ultimately, closing up 0.7% at 6,026, marking a 4,308-trading-session stretch since it moved from one 1,000-point milestone to the next, according to Dow Jones data. That represents the index’s longest gap between milestones since 1995, when the tech-laden benchmark took 24 years, or 6,171 trading sessions, to reach 1,000. Overall, it has taken the Nasdaq 46 years since its inception in 1971 to hit 6,000.
“Tech is so strong this year as the cloud [storage technology] is driving more and more of the earnings within the Nasdaq index and it’s a growth area that’s expected to continue,” said Chris Zaccarelli, chief investment officer of Cornerstone Financial Partners (see table below).
|Nasdaq Milestone||1st close at a milestone||Nasdaq closes||No. of trading days to next milestone|
|1000||July 7, 1995||1005.98||6,171|
|3000||Nov. 3, 1999||3018.51||329|
|4000||Dec. 29, 1999||4041.46||38|
|5000||March 9, 2000||5046.86||49|
|6000||April 25, 2017||6,025.49||4,308|
|Source: Dow Jones data|
Indeed, the last time the Nasdaq was somersaulting higher was in the late 1990s and early 2000s, during the notorious dot-com bubble. That period of buzzy tech companies with dubious business models, exemplified by Pets.com, didn’t end well for investors. In fact, Wall Street took 15 years to recover, with the index not returning to the 5,000 level again until March 2015.
This time around, stocks are running higher on the back of easing geopolitical risks, better-than-expected corporate earnings and the so-called Trump rally, fueled by hope of tax cuts, infrastructure spending and deregulation from President Donald Trump.
Markets also are anticipating news on corporate tax reform after Trump said a plan to cut corporate taxes to 15% would be revealed on Wednesday.
Even though, enthusiasm over equities had dampened somewhat since the November election, the Nasdaq has been relatively steady among its equity-benchmark peers. Since the U.S. presidential election, the Nasdaq has gained about 16%, compared with a 14.6% climb for the Dow Jones Industrial Average
and an 11.6% advance for the S&P 500 index
over the same period.
On Monday, the Nasdaq closed at a fresh record as the global equity market rallied on centrist Emmanuel Macron’s first-round victory in the French presidential election, averting fears of a head-to-head battle between euroskeptic candidates, far-right politician Marine Le Pen and far-left Jean-Luc Melenchon. Le Pen and Macron are set to face off in a May 7 runoff, with Macron holding a sizable lead in early polling.
How significant is Nasdaq 6,000? Maybe not at all, but the Street adores symbolic levels.