Nasdaq Hits All-Time High... Approaching 10,000 Mark (Comprehensive Report 2)

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The Nasdaq index, centered on technology stocks, reached an all-time high on the U.S. New York stock market. The S&P 500 index, which covers the overall New York stock market, also recovered to the level seen at the beginning of the year. Judging by the indicators alone, the economy, which had contracted since the outbreak of the novel coronavirus infection (COVID-19), is clearly showing signs of revival.

On the 8th (local time) in the New York stock market, the Nasdaq rose 110.66 points (1.13%) to 9,924.74. The Nasdaq had experienced a plunge after recording 9,817.18 on February 19, but it broke the record again after four months and is now on the verge of surpassing the 10,000 mark. The Dow Jones Industrial Average and the S&P 500 index also approached all-time highs. The Dow closed at 27,572.44, up 461.46 points (1.7%), and the S&P 500 closed at 3,232.39, up 38.46 points (1.2%). The S&P 500 returns turned positive. Electric vehicle maker Tesla surged 7.26% to an all-time high of $949.92.

The stock market rise on this day reflected the surprise strength of the employment data released last week and expectations for economic reopening. According to the recently released May employment trends, nonfarm payrolls in the U.S. increased by 2.5 million, contrary to initial expectations. Also, New York, a financial hub, began phase one of economic normalization measures from this day, raising hopes for economic recovery. New York was the region most severely affected by the spread of COVID-19 in the U.S. Accordingly, partial economic activities such as construction, manufacturing, agriculture, and wholesale and retail (takeaway or street vending) transactions became possible in New York as well.

In particular, the stock market rally on this day ignored concerns about the U.S. economic downturn. The World Bank (WB) lowered its global economic growth forecast for this year to minus (-) 5.2% and predicted a 6.1% contraction for the U.S. economy. The National Bureau of Economic Research (NBER), a nonprofit private research organization that assesses the U.S. economy, judged that the U.S. economy ended its 128-month expansion phase in February and entered a recession.

Experts analyzed that the stock market rise reflected investors placing emphasis on future expectations rather than concerns about the past U.S. economic recession.

Andrew Slimmon, Chief Manager of Morgan Stanley Asset Management, explained, "Recent indicators instill confidence that we are emerging from the recession caused by COVID-19."

U.S. President Donald Trump, who is focusing on economic recovery for re-election, also welcomed the stock market rise. He emphasized on Twitter that day, "It is an important day for the stock market. Smart money and the world know we are on the right path, and jobs are recovering quickly. Next year will be the best year ever."

This content was produced with the assistance of AI translation services.