By Dan Strumpf
The Nasdaq Composite Index breached its all-time closing high
for the first time in 15 years on Thursday, the latest push higher
for the technology-heavy index that has pulled ahead of the broader
market this year.
The index topped its all-time closing high of 5048.62--last
reached at the height of the dot-com bubble on March 10, 2000--at
11:55 a.m. ET.
The rise continued through the afternoon, with the Nasdaq
Composite gaining 24 points, or 0.5%, to 5059--though still below
its all-time intraday high of 5132.52, also set on March 10,
2000.
The latest rise follows several stalled attempts to surpass the
index's high-water mark in recent months. The Nasdaq rose above
5000 in early March, but fell in subsequent weeks amid a cloudy
first-quarter earnings season and hiccups in the U.S. economy.
While the Dow Jones Industrial Average and the S&P 500 have
notched dozens of new records in recent years, the Nasdaq has taken
much longer to recover from the dot-com bust. The landscape for
technology stocks in the last 15 years is much changed, with
stalwarts like Google Inc. and Apple Inc. replacing the hot
Internet startups that dominated the Nasdaq in 2000.
The changes in the index have been among the forces lifting it
higher in recent years. At its peak in 2000, 65% of the market
capitalization in the Nasdaq Composite was technology stocks.
Today, the technology weighting in the index has shrunk to 43%. At
the same time, the number of companies in the index has fallen
dramatically--to 2,569 today, down from 4,824 in March 2000.
Now, the index's biggest firms include many highflying stocks in
the biotechnology sector. Gilead Sciences Inc., with a market
capitalization of $154 billion, has risen 11% this year and 52% in
the last 12 months. Amgen Inc., another top performer with a market
size of $129 billion, is up 5.5% this year and 46% in 12 months.
Biogen Inc., at $99.4 billion, has soared 26% this year and 47% in
12 months.
Also propelling the index have been steady gains in Apple Inc.,
the stock market's largest company by market cap. The iPhone maker
is up 18% in 2015 and 75% in the last year.
The Nasdaq's recent rise comes against a backdrop of renewed
worries over the slowing pace of U.S. economic growth and hiring,
and concerns over the prospect of interest-rate increases by the
Federal Reserve, expected later this year. In Europe, new stimulus
efforts by the European Central Bank and signs of growth have
cheered investors, but Greece's fiscal troubles continue to cast a
shadow over the continent.
The Nasdaq, along with other major indexes, turned higher at
midday, reversing early losses. The Dow Jones Industrial Average
rose 47 points, or 0.3%, to 18085, and the S&P 500 gained six
points, or 0.3%, to 2114.
Despite the Nasdaq record, it was business as usual for many
traders across Wall Street. Several attributed the midday
turnaround to mundane technical reasons following a sudden rally in
the stock futures market.
"Today is one of the bigger day of earnings that's out there, so
there's a lot for people to go through," said Jesse Lubarsky, a
trader at Raymond James in New York. "It's business as usual."
Several disappointing first-quarter earnings reports continued
to keep some shares in check. Shares of General Motors Co. fell
3.3% after the auto maker reported a $945 million net profit in the
first quarter, but its operating performance fell short of
expectations.
Procter & Gamble Co.stock lost 1% after the consumer
products maker said sales fell 7.6% in the March quarter due to the
strong dollar
Shares of AT&T Inc. gained 4.3% after first-quarter earnings
fell but still came in better than expectations.
"We know it's not easy for U.S. corporations to increase
earnings meaningfully at this point in the cycle," said Dan Morris,
global investment strategist at TIAA-CREF, which manages $611
billion. Companies had been looking to sell more products in
Europe, where the European Central Bank is attempting to kick-start
growth, he said. "That was one of your bright spots, and that
bright spot just got a little less bright," he added.
In Europe, Germany's DAX fell 1.2% and France's CAC 40 lost
0.6%.
In economic news, U.S. jobless claims rose by 1,000 to 295,000
in the week ended April 18, the Labor Department said Thursday.
Economists surveyed by The Wall Street Journal expected 290,000
claims.
Write to Dan Strumpf at daniel.strumpf@wsj.com
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