Nasdaq eclipses 8,000 milestone for first time
Powered by big gains in popular technology companies such as Apple, Amazon and Netflix, the Nasdaq composite barreled through the 8,000 milestone for the first time Monday and closed at an all-time high.
The surge is the latest sign that the longest bull market in Wall Street history remains healthy and continues to be driven by tech companies that are transforming the way people communicate, shop and consume media.
The Nasdaq rose 0.9 percent to close at 8,017.90, after notching an intraday record of 8024.94.
“New highs are a sign of strength,” says Chris Verrone, a partner at Strategas Research Partners.
The Nasdaq, which is up 16.1 percent this year after surging 28.2 percent in 2017, is led by the “FAANG” stocks – Facebook, Apple, Amazon, Netflix and Google parent Alphabet – which are responsible for a big chunk of the index’s sizable gains.
Innovation in smartphones, social media, video streaming, cloud-based computing and machine learning is boosting the fortunes of tech leaders.
Apple is the most valuable company in the USA and this month became the first American company to achieve a market value of $1 trillion.
The FAANG stocks have been among the biggest gainers in the record-long bull market, which has now lasted 3,548 days.
Since the start of the bull run on March 9, 2009, Netflix shares have risen more than 5,600 percent, Amazon has rallied more than 3,000 percent and Apple has gained more than 1,700 percent, according to data from S&P Dow Jones Indices.
On Monday, shares of Netflix,Facebook and Alphabet all jumped 1.6 percent. Apple rallied nearly 1 percent and Amazon closed 1.2 percent higher.
Tech stocks are being driven higher by investors because of strong profitability. The information technology sector of the Standard & Poor’s 500 stock index, for example, posted profit growth of more than 26 percent in the second quarter.
“Earnings” are driving the rally, says Gary Kaltbaum, president of Kaltbaum Capital Management. “Technology always leads markets. And now we’re getting another leg up.”
It’s not only the Nasdaq, or FAANG, that’s hitting new highs. In a sign of the market’s broad advance, other stock indexes, including those such as the Value Line Geometric Index, where each stock has an equal weighting in the index’s fortunes, hit fresh highs.
The stock market is revving after hitting a fresh all-time high last week.
“This type of market reset is consistent with strong returns going forward,” Todd Sohn, a technical analyst at Strategas Research Partners, told USA TODAY.