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NASDAQ'S
RECORD MARCH 2000 CLOSE-1 YEAR LATER
It
took Nasdaq stocks almost two years to close at a
record 5048.62
on March 10th 2000.
While the subsequent decline was not a huge
surprise on Wall Street, few expected that a year
later the market would look so bleak.
The
average decline of 60% has had an impact via the
so-called wealth effect in a U.S. economy where
some 50% of adults own stocks either directly or
indirectly.
Federal
Reserve Chairman Alan Greenspan, has said that a
glut of high-tech manufacturing and falling
prospects for returns in 2000 foretold a slowdown
was coming, but not the speed or extent of it.
"The
adjustment has occurred much faster than most
businesses anticipated, with the process likely
intensified by the rise in the cost of energy
that has drained business and household
purchasing power," Greenspan has said.
In
response, the Fed dropped interest rates a full
percentage point in January, and more cuts are
expected.
An
Irish Times analysis provides data on the
performance of Irish technology companies quoted
on Nasdaq. One of the worst performers Trintech, fell from a
high of $75.44 on March 10th, 2000 ($150.875 before the two for
one share split) to $2.65 on week commencing March 5, 2001.
Baltimore
Technologies has fallen from $44 to a low of
$6.50 and Riverdeep which hit a high of $72.50 on
March 9th, 2000, is trading in the $25/$26 range.
Even the biggest tech
names have proved to be no refuge for investors
since the Nasdaq peaked
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