15 years on, Nasdaq recoups losses of dot-com crash
Mark April 23, 2015 as the day the Nasdaq market finally left the dot-com crash, and billions of dollars lost to the first technology bubble, behind.
It’s been a long time — 15 years, one month and 13 days to be exact. On Thursday, the Nasdaq Composite Index finished at a new closing high, 5,056.06, topping the previous mark set on March 10, 2000 of 5,048.62.
This time around, the gains on the Nasdaq exchange might hold on for a bit longer.
The upstart market that symbolized the new era of the Internet economy and digital life — as opposed to the old heavy-industry stalwarts of the Dow Jones Industrial Average — climbed spectacularly from 1996 to early 2000.
Over that time the index quintupled to mint thousands of new multi-millionaires and fund sharp and quirky new companies rooted in San Francisco and Silicon Valley. The Dow barely doubled in the same period.
Investors and media celebrated it as the “New Economy,” leaving the old one behind. The Nasdaq exchange itself was the symbol, trades humming through computers while the New York Stock Exchange still had dealers oper- ating via slips of paper and hand signals on a physical trading floor.
But the Nasdaq, trading many companies that proved to be more dreams on paper and in garages than sources of tangible profits, then crashed as spectacularly, losing nearly all of the late 1990s gains in 30 months, and stunning hundreds of thousands of investors who ventured into the markets for the first time drawn by dot-com dreams.
The market bottomed 1,114.11 in October 2002.
Spurred by the economy’s growth under low interest rates and higher government spend-
at ing, it slowly regained the trust of once- burned investors and pressed back toward the 3,000 level, only to have the rug pulled out again with the financial crisis.
That time, all the markets plunged, and the Nasdaq, which was strengthening with more proven Internet and biotechnology companies, fared less bad than the other key indices, the Dow and the S&P 500.
From the 2009 bottom, the Nasdaq bounced back faster and farther. Yet by 2013, when the Dow and S&P began topping previous records and continued to do so, the Nasdaq was still two years from total recovery.