New York (BBN)-US stocks rallied on Friday, with the Nasdaq Composite Index closing at its highest level in 15 years.
The Nasdaq Composite climbed 34.04 points, or 0.7%, to end at 5026.42, placing the index within striking distance of its record close of 5048.62, reached in March 2000.
The Nasdaq Composite is approaching its record closing level, set in March 2000, reports The Wall Streets Journal.
On Friday, the index hit 5042.14, its highest point since the index reached its intraday record of 5132.52 on March 10, 2000. It has been nearly three weeks since the Nasdaq broke through and closed above 5000 for the first time since 2000
“Clearly this year growth is getting rewarded,” said Bob Turner, chief investment officer for Turner Investments, which manages roughly $1 billion. He added that the rise in many technology stocks in the past year has been driven by rapid revenue and profit growth.
“This is such a better high level than it was in 2000, because that was all speculation,” he said. “Now it’s really sustainable.”
The Nasdaq still remains below its record closing level, and investors and traders warned it may take time before it reaches that milestone.
“Human emotion is something that causes indexes like the Nasdaq to pause at their magical, mystical summit levels,” said Jim O’Donnell, chief investment officer at San Francisco investment firm Forward Management, which manages roughly $6 billion.
As indexes near record highs, there tends to be a lot of selling pressure, he said, adding that it could take time for the Nasdaq to break through its record and run higher.
The Dow Jones Industrial Average advanced 168.62 points, or 0.9%, to 18127.65 and the S&P 500 rose 18.79 points, or 0.9%, to 2108.06.
The Russell 2000 reached a record Friday, climbing 11.51 points, or 0.9%, to 1266.37.
Small-capitalised stocks have recorded bigger gains than the broader market in recent sessions, due in part to worries about the stronger dollar’s impact on large, multinational companies.
The Russell is up 2.8% in the past month, compared with the Dow industrials and the S&P 500 indexes which are roughly flat.
Traders said investors are taking this outperformance as a bullish indicator for the stocks in general.
Traders noted volumes in the equities market on Friday were elevated, a result of the simultaneous expiration of four types of futures and options contracts, referred to as quadruple witching. It tends to boost stock-market volumes.
U.S. stocks rallied on Friday, with the Nasdaq Composite Index hitting its highest intraday level in nearly 15 years.
The stock market received a shot of enthusiasm earlier this week after the Federal Reserve’s latest statement and comments from Chairwoman Janet Yellen suggested the central bank remains in no rush to raise interest rates.
Even though the Fed opened the door to a rate increase this year by removing its promise to be “patient” before acting, the overall dovish stance prompted a rally in stocks Wednesday that was partially undone on Thursday.
The Dow has gained 2.1% this week and the S&P 500 has advanced 2.7% in the same period, snapping a streak of three consecutive weeks of losses.
Short-term rates have been held near zero for more than six years.
During those years investors have poured money into stocks, whose returns were more attractive than other asset classes due to such low interest rates.
In recent years investors have increasingly scrutinized Fed statements for hints of when exactly rates will rise, and leading up to Wednesday’s statement many were bracing themselves for a June rate increase.
Wednesday’s statement, according to some managers, signaled that there is little chance of the Fed raising rates that early.
“They’re going to be cautious, they’re going to be deliberate in how they do this,” said Mark Broughton, senior portfolio manager at Rainier Investment Management, which manages about $6.1 billion, referring to the Federal Reserve’s plan to raise rates.
BBN/AI-21Mar15-2:00pm (BST)
