New York--Fifteen years after its bubble exploded dramatically costing tens of thousands of hopeful tech millionaires their savings, the Nasdaq finally made its way back this week.
And this time, underpinning the market's new record are real earnings at reasonable price measures, suggesting investors need not fear a repeat of the dot-com crash of 2000.
The Nasdaq led Wall Street higher for the week through April 24, putting on 3.25 percent. Marking the long crawl back from a near-80 percent plunge, it pierced the previous record set on March 10, 2000 on Thursday by more than five points, closing at 5,056.06.
Then, with a flourish from both the old and new leaders of the New Economy (as it was heralded before the 2000 crash) -- Amazon, Microsoft and Google all surged on strong quarterly earnings reports -- the Nasdaq Composite added to that Friday with another 36 points, to end the week at 5,092.08.
Dragged up in its wake were the Dow Jones Industrial Average, which put on 1.43 percent to 18,080.14 for the week, and the broader S&P 500, up 1.76 percent, itself ending at a new high, by a fraction of a point.
"It's the return of the New Economy, but a New Economy that makes money," said Gregori Volokhine of Meeschaert Financial Services.
That was a reference to the more sane price-earnings multiples for the tech-heavy exchange today. Back in 2000, the p/e ratio was an unsustainable 190 times, mainly because the Nasdaq was full of new tech companies full of hopes and ideas but no earnings.
Today, the Nasdaq exchange is more mature, with a broader base of Internet, tech, biotechnology and pharmaceutical, and non-tech consumer goods companies all with proven earnings track records. The p/e ratio is around 25.
AFP
