Nasdaq breaks record-high set during dotcom boom
NEW YORK – The Nasdaq Composite index surpassed the 15-year all-time high it set during the peak of the dotcom bubble on Thursday as more data showed the US economy was gathering steam.
The index .IXIC hit 5,137.36, topping the previous high of 5,132.52 it touched on March 10, 2000. The S&P and Dow were at their highest levels since early June.
The Fed said on Wednesday that the U.S. economy was likely strong enough to withstand an interest rate increase later this year but cut its economic growth forecasts for 2015 because of a weak start to the year.
Even though a majority of Fed officials continue to see higher rates by the end of 2015, they expect rates to rise slightly less by the end of 2016 and 2017 than they did in their March forecasts.
Fed Chair Janet Yellen reiterated that the central bank remains data-dependent, which could prompt investors to keep a sharper eye on economic data in coming months, especially monthly the employment reports.
“Today’s markets are higher on a combination of the data and the Fed signaling that it will begin raising rates this year but at a shallower pace,” said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.
“I think investors are getting comfortable with the Fed’s plans and anyway the first hike will be mostly symbolic.”
U.S. consumer prices in May recorded their largest increase in more than two years as gasoline prices surged, while factory activity in the U.S. mid-Atlantic region expanded in June at a much faster pace than expected.
Other data showed the labor market continued to tighten as first-time applications for unemployment benefits declined to a near 15-year low last week.
At 11:35 a.m. ET the Dow Jones industrial average .DJI was up 205.53 points, or 1.15 percent, at 18,141.27, the S&P 500 .SPX was up 20.95 points, or 1 percent, at 2,121.39 and the Nasdaq Composite was up 68.09 points, or 1.34 percent, at 5,132.97.
All of the 10 major S&P 500 sectors were higher with the health index .SPXHC leading the gains with a 1.3 percent rise.
Microsoft’s (MSFT.O) 1.4 percent rise lifted the Nasdaq and the S&P 500, while 3M’s (MMM.N) 1.8 percent gain was the biggest boost to the Dow. All 30 Dow components were in the black.
Greece continues to weigh on investors’ minds as the country drifts closer to a default.
Euro zone officials have not discussed the debt restructuring proposed by Greece because they want Athens to first implement the reforms it promised in exchange for loans it got from the euro zone, the head of euro zone finance ministers said.
Fitbit (FIT.N) shares ran up as much as 60 percent to $31.90 in their debut, valuing the maker of popular wearable fitness-tracking devices at $6.5 billion.
Oracle (ORCL.N) shares fell as much as 8.7 percent to $40.97 – a nearly six-month low – a day after the company forecast a quarterly profit below analysts’ estimates.
Advancing issues outnumbered decliners on the NYSE by 2,278 to 662. On the Nasdaq, 1,988 issues rose and 683 fell.
The S&P 500 index showed 34 new 52-week highs and 2 new lows, while the Nasdaq recorded 123 new highs and 22 new lows. –Reuters