The Nasdaq composite index briefly broke through 3,000 on Wednesday for the first time since the collapse in dot-com stocks more than a decade ago. Stocks ended lower, but it was still the best February on Wall Street in 14 years.
The milestone for the Nasdaq, heavy with technology stocks, came a day after the Dow Jones industrial average closed above 13,000 for the first time since May 2008.
Apple, the Nasdaq’s biggest component, topped $500 billion in market value, the only company above the half-trillion mark and only the sixth in U.S. corporate history to grow so big. Apple might reveal its next iPad model next week.
The Nasdaq last hit 3,000 on Dec. 13, 2000. Its last close above 3,000 was two days earlier. It was only above 3,000 for seconds on Wednesday before closing down 19.87 points at 2,966.89.
The Dow lost 53.05 to close at 12,952.07. The Standard & Poor’s 500 index fell 6.50 points to close at 1,365.68.
For the month, the Dow gained 2.5 percent, the S&P 4.1 percent and the Nasdaq 5.4 percent. The last time the stock market had such a strong February was in 1998, when the S&P gained 7 percent.
Stocks opened higher after the government said that the economy grew faster at the end of last year than previously estimated — a 3 percent annual rate, the best reading since the spring of 2010.
Stocks fell sharply after about an hour, then recovered by mid-afternoon, after the Federal Reserve’s survey of regional economic conditions said the economy strengthened in the first six weeks of the year.
They had turned negative around 10 a.m., after Federal Reserve Chairman Ben Bernanke testified on Capitol Hill that the economy has performed better than expected in recent months. He said gas prices will add to inflation and unemployment is falling faster than expected.
Bernanke’s remarks made it appear less likely that the Fed will begin another round of bond-buying to juice the economy. Bond-buying increases the money supply and could add to inflation, so signs of inflation make it a less appetizing option. And unemployment must remain high for the Fed to justify such an aggressive policy.
U.S. Treasury debt plunged on speculation that the Fed wouldn’t enter the market again. The yield on the 10-year Treasury note spiked to 2.02 percent during Bernanke’s remarks, from 1.94 percent minutes earlier. It fell back to 1.97 percent. Bond yields rise as their prices fall.
Materials and energy companies had the steepest losses of the S&P 500’s 10 industry groups. Consumer staples was the only industry to close higher.
The price of gold plunged $77 per ounce, the biggest one-day drop since September, as traders dialed back their expectations that the dollar would be weakened by another round of economic stimulus from the Fed. Gold settled at $1,711.30 an ounce , its lowest close since Jan. 25. Silver also fell sharply.
The Nasdaq has gained 14.5 percent this year, compared with 6.4 percent for the Dow and 9.1 percent for the S&P 500. The Nasdaq already has risen almost as much this year as it did in all of 2010. It edged lower in 2011.
Tech stocks appear to be cheap compared with their prices over the past 10 years. The Nasdaq’s price-earnings ratio is 16.9, compared with a daily average since 2003 of 19.6, according to data from FactSet.
Price-earnings ratios measure the cost of a share relative to the company’s profits. A lower price-earnings ratio suggests that stocks are undervalued, or that investors expect earnings to decrease.