Tech Stocks Rule
Red-hot technology stocks had Wall Street sizzling Thursday. The Dow rose back above the 10,000 mark.
But the real story is the tech-heavy NASDAQ, which closed above 5,000 for the first time ever. CBS News Correspondent Anthony Mason reports on this latest milestone for the high-flying high-techs.
It took 23 years for the Dow to go from 1,000 to 5,000. The NASDAQ made the journey in less than five. Since July of 1995, it's up an incredible 570%, blowing by 5,000 on Thursday.
So far this year, the NASDAQ, dominated by technology stocks, is up 24 percent, while the Dow, which has been depressed by concerns about industrial company profits, is down 13 percent.
Technology stocks that trade on the New York Stock Exchange also rose today. Computer maker Hewlett-Packard soared, driving the Dow into positive territory. America Online also rose.
Telecommunications stocks also rose amid the latest wave of takeover talk.
"It just points out that the market is very smart," says Al Goldman of A.G. Edwards. "It's allocating its assets to the most dynamic part of the economy. And that's technology and the Internet."
Just eight years ago, when Bill Clinton was elected president, there were 50 pages on the World Wide Web. Today, there are 50 million.
"This is an incredibly profound trend. We have 150 million people on line worldwide right now. Over the next five to seven years, that'll go to a billion," says Merrill Lynch's Henry Blodgett.
That means somebody's got to build the infrastructure for the exploding Internet. As Blodgett says, "You need switches, you need routers, you need pipe, you need telecom lines. Also, you need software."
So which companies have been NASDAQ's hottest performeres over the past year?
- Ariba, a business to business software company is up 800 percent.
- Juniper Networks is up 730 percent.
- JDS Uniphase, a fiber optics company, is up 625 percent.
How high? Some analysts say 6,000 is within range by the end of the year. And why not? Forty-six trading days is all it took for the NASDAQ to go from 4,000 to 5,000. By contrast, it took the Dow nearly nine months to rise from 4,000 to 5,000 in 1995.