Nasdaq Hits 5,000 for First Time
NEW YORK (AP) _ The Nasdaq composite index, soaring on investors’ continuing enthusiasm for high-tech and Internet stocks, passed 5,000 today for the first time in its 29-year history.
The index rose 95.28 to 5,000.13 within the first half-hour of trading on Wall Street. It was just two months ago that the Nasdaq passed 4,000, and four months ago that it crossed 3,000.
The technology-focused Nasdaq reached its milestone as other stock market indicators, including the Dow Jones industrials, were searching for a direction after last week’s big rally on Wall Street. The Dow, which gained more than 500 points last week, was down about 20 points at the 10,363 level in early trading today.
The Nasdaq has surpassed the Dow and other stock market indicators since late last year as investors have enthusiastically bought high-tech, Internet and biotechnology stocks seen as having the greatest potential for profit growth in the coming years.
Today, as the Nasdaq reached 5,000, Wall Street continued its recent trend of splitting between high-tech and low-tech sectors. Investors worried about interest rates in recent months have favored Nasdaq companies whose profits aren’t threatened by higher borrowing costs. They’ve been selling financial, industrial and retailing companies that are more vulnerable to interest rate increases.
Investors’ migration toward Internet stocks surge in the Nasdaq has reflected the economy’s increasing shift toward service companies and away from manufacturing businesses. While this shift is not new, the growth of the Internet and related industries has intensified the creation of jobs in the service sector.
The Nasdaq composite began trading at 100 on Feb. 8, 1971, when most of the stocks on the Nasdaq exchange were smaller companies not large enough or glamorous enough to be listed on the New York Stock Exchange. The Nasdaq market has grown in stature in recent years, in part because prominent high-tech companies including Microsoft and Intel has chosen to remain with Nasdaq rather than switch to the NYSE.