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Nasdaq dives below 2000
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From USA Today March 13
Stocks melted down on Wall Street Monday as the Nasdaq sank to its worst bear market ever.
The Nasdaq Composite index plummeted 86.07 points at midday, to 1966.71, poised to close below 2000 for the first time since Dec. 14, 1998.
The fall from Nasdaq's all-time high of 5048.62 on March 10, 2000, makes the sell-off even more brutal than the 60% sell-off during the bear that ravaged the market between 1973 and 1974. Now investors worry the USA's economic slowdown is doing serious damage to companies' earning power worldwide.
“It's like a depression. It's a technology depression,” says Edward Nicoski, technical analyst, U.S. Bancorp Piper Jaffray.
But in a dramatic shift, panic selling spread beyond tech stocks to even household names. Blue chips such as J.P. Morgan and General Electric suffered. The Dow Jones industrial average shed 275.40 points to 10,369.22 at midday.
Even more alarming was Monday's drop of the S&P 500, a broad measure of the stock market. The index plunged 36.83 points to 1196.59 at midday, putting it firmly in bear market territory, too.
It's becoming clear that fewer and fewer stocks are bullet-proof, making already nervous investors even more jittery.
“The S&P 500 is a blue-chip index, so when it's down 20%, you can't laugh that off,” says Robert Stovall, market strategist at Prudential Securities.
The S&P 500 in bear territory is worrisome, because unlike the tech-dominated Nasdaq, it is made up of a broad array of companies from all sectors of the economy, says Hugh Johnson, strategist at First Albany.
“The S&P 500 (is) sending us a signal that stock market weakness won't end anytime soon,” Johnson says.
Investors have been stunned by the breadth and speed of the destruction. The Nasdaq has broken down even faster than it rose during its unprecedented rally.
It's taken just 253 trading days for the Nasdaq composite index to sink from 5000 a year ago to 2000. It took 416 days to rise from 2000 to 5000, says ScanShift.com.
Market experts have all but given up trying to guess when the market will bottom. And although many stocks have dropped to bargain levels, there's still so much uncertainty, Prudential strategist Ed Keon says the selling could last another 4 months.
“The market has been frightening,” he says.
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