The Nasdaq electronic exchange, dominated by high-tech and Internet issues, has just turned in the worst annual performance of its 30-year history, declining 39.3 percent over 12 months as the "new economy" bubble exploded.
Once seen as the most promising US financial market, capable of transforming youthful investors and risk-takers into instant millionaires, the Nasdaq finished the year at 2,470.52 points, down from 4,069.31 on December 31, 1999.
After having gained 85.6 percent in 1999, Nasdaq powered ahead in the first months of 2000, soaring to a record 5,048.62 on March 10.
Hundreds of Internet firms, created just several months earlier, were seeing their share prices increase by 200 percent, 300 percent and more in a single day -- even though they could provide no short- or long-term assurances of profitability.
New economy stars such as Yahoo, Amazon and eBay were seeing their stocks at levels of $100 to $250, dramatically eclipsing those of old economy stalwarts such as Boeing or Ford.
The bubble finally burst in April 2000, setting off a steady slide that by the end of the year had produced a spate of company failures as the US economy ran out of steam.
Investors who jumped in last March when the Nasdaq was riding high found themselves saddled with portfolios that had lost half their value.
Shares of Yahoo for example were worth no more than $30 dollars at close of trade Friday, December 29, after having surged to $250 dollars on January 4.
Amazon had plunged to $16 dollars from $91 in January, with investors questioning its future ability to turn a profit. The online auction site eBay finished the year at $33 dollars, down from $127.50 on March 27.
For online retailer Priceline.com the fall was particularly brutal, as it ended 2000 at $1-15/16 against $104.25 on March 14.
The big names in the computer industry fared little better in the face of weakening sales and less confident consumers.
Software giant Microsoft closed out the year at $43, a far cry from the $119 it fetched at the end of 1999.
IBM was down 35 percent compared with September, Compaq at the end of the year was off 57 percent from its August levels while Dell had lost 70 percent since March.
For the new year, analysts at SalomonSmithBarney see a modest rebound in the Nasdaq to 3000 points. Less optimistic, JP Morgan predicts stagnation next year at around 2,500 points.— (AFP)
© Agence France Presse 2000
