Nasdaq Hits Historic 10,000; Apple, Facebook, Amazon Stocks Hit All-Time Highs

Profit-taking, plus the sobering news Monday the U.S. officially fell into an economic recession in February, temporarily ended the irrational ebullience that has Wall Street tracking record highs despite the broader economy still at the mercy of COVID-19.

Monday saw markets continue to climb on the optimism the U.S. is past the worst of the first wave of the COVID-19 pandemic. The NASDAQ hit a new record while the S&P 500 erased its losses for the year. The only damper to this cheerful picture was the start of profit-taking that became more widespread Tuesday.

Investor optimism fizzled Tuesday with both the Dow Jones and the S&P 500 ending the day in the red. The Dow fell 1.09% to 27,272.30, while the benchmark S&P 500 shed 0.78% to close at 3,207.18.

The Nasdaq again proved immune to the creeping doubt among investors the economy isn’t as strong as it looks. Tech investors seemed unfazed by the news the U.S. officially entered a recession in February. The declaration was made Tuesday by the National Bureau of Economic Research (NBER), the 100-year-old private nonprofit research organization that marks the start and end dates of U.S. recessions.

The index ended on Tuesday up only 0.29% to 9,953.75, a scant improvement not reflective of the massive gains made by its leading stocks. But it rose briefly above 10,000 points — a first in its history — before retreating.

On Tuesday, Facebook Inc., Apple Inc., Amazon.com Inc. and Microsoft Corporation all hit new all-time highs as the index surged past 10,000 points. Tech stocks are seeing a “V-shaped” recovery indicative of a rapid comeback from the depths of the unprecedented economic slowdown induced by the COVID-19 pandemic.

Analysts attribute the invulnerability of tech stocks to the enormous advantage of most tech firms being able to keep doing business as their employees are more attuned to work-from-home compared to other industries.

Tuesday’s tech surge brought the market cap of Apple, Amazon, Facebook and Microsoft to about $5 trillion. Apple ended Tuesday with its stock up 3.2% and a market cap of $1.49 trillion. Amazon rose 3.04% to a $1.30 trillion market cap; Facebook improved 3.14% to $680 billion; while Microsoft edged upwards to 0.76% to $1.44 trillion.

Markets are “running high on people’s expectation that we actually started a new bull cycle, that the economic cycle will have been revitalized by the downturn,” believes Maris Ogg, portfolio manager at Tower Bridge Advisor, a wealth and asset management firm based in Philadelphia.