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This Day In Market History: Dow Hits Dot-Com Bubble Peak

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This Day In Market History: Dow Hits Dot-Com Bubble Peak

Each day, Benzinga will take a look back at a notable market-related moment that happened on this date.

What Happened? On this day in 2000, the Dow Jones Industrial Average reached its dot-com bubble peak.

What Else Was Going On In The World? In 2000, Vermont passed HB847, a bill legalizing Civil Unions for same-sex couples. The final “Peanuts” comic was published following creator Charles Schultz’s death. The average monthly rent in the U.S. was $675.

Dow Tops Out: The tech-centric Nasdaq was the epicenter of the dot-com bubble, but a rising tide lifts all boats. In the two years leading up to Jan. 14, 2000, the Dow Jones Industrial Average gained 50.5%.

The Nasdaq and the S&P 500 wouldn’t hit their dot-com era peaks until March of 2000, but the Dow beat them to the punch, topping out at 11,750 on Jan. 14.

Over the next two years, the Dow dropped 15.6%, but it held up relatively well compared to the 22.3% drop in the S&P 500 and the 51% drop in the Nasdaq.

At the time, the Dow’s largest components included General Electric Company (NYSE: GE), Exxon Mobil Corporation (NYSE: XOM) and Microsoft Corporation (NASDAQ: MSFT).

Following its January 2000 peak, the Dow wouldn’t make new all-time highs again until 2006. However, it fared much better than the Nasdaq, which wouldn’t surpass its dot-com bubble peak until 2015.

Twenty-one years later, investors who bought the SPDR Dow Jones Industrial Average ETF Trust (NYSE: DIA) on the day the Dow peaked back in 2000 and held until today would be sitting on a 323.3% total return.

 

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