15 years on, Nas­daq re­coups losses of dot-com crash

The China Post - - INTERNATIONAL -

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.

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