The Nasdaq market's exterior in Times Square after it breached the 6,000 mark for the first time ever on Tuesday, in New York City, the US, on Tuesday. Picture: REUTERS/SHANNON STAPELTON
The Nasdaq market's exterior in Times Square after it breached the 6,000 mark for the first time ever on Tuesday, in New York City, the US, on Tuesday. Picture: REUTERS/SHANNON STAPELTON

The Nasdaq Composite index crossed the 6,000 threshold for the first time on Tuesday, aided by gains in a handful of large-cap tech names, more than 17 years after it last marked a 1,000 point milestone.

The Nasdaq first breached the 5,000 mark on March 7, 2000 and closed above that level two days later during the height of the tech boom. It had taken the index only slightly more than three months to climb from 4,000 to the 5,000 mark.

“It’s different this time. It really is. This isn’t driven by companies that don’t have products,” said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh, referring to the tech bubble that burst in 2000.

Of the current index, Forrest said, “You can’t just have a knee-jerk reaction and say tech is doing well and assume it’s tied solely to corporate spending cycles. Tech tends to be a late-cycle phenomenon, though the kind of tech that populates the Nasdaq these days is consumer-focused.”

The top five US companies by market capitalisation, Apple, Alphabet, Microsoft, Amazon.com and Facebook, are Nasdaq components.

The total market capitalisation of the Nasdaq Composite stands at $9.6-trillion. The five largest companies have increased in market value by more than $400bn in 2017 alone.

The passing of the 6,000 threshold is mainly symbolic, said Sameer Samana, global quantitative strategist at Wells Fargo Investment Institute in St Louis.

“There are some on the technical analysis side who might view the clearance of this hurdle as a reason to get in, and so for a short time gains may accelerate,” he said. “If it is widely publicised, then it may lead to greater participation on the part of retail investors.”

Since the cycle bottom in March 2009, which ended the Great Recession-related stock market selloff, the Nasdaq Composite has gained about 365%. That compares with a 250% gain in the S&P 500 and a 420% increase in the Nasdaq 100, the top 100 companies in the index.

Reuters

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