Nasdaq breaks symbolic 2000 level

The Nasdaq symbolises the 1990s boom

The Nasdaq index of technology shares briefly broke the psychological 2,000 barrier on Wednesday.

The index, icon of the 1990s technology boom, last traded above 2,000 nearly two years ago.

Its strong performance on Wednesday reflected growing confidence that the US economy is firmly in recovery mode after three years of sluggish growth.

However, it proved unable to hold onto its gains, closing 1% lower at 1,960 as traders chose to take profits.

1999 again?

"(2,000) is what I would call a 'nostalgia' target for the individual investor," said Frederic Dickson at DA Davidson & Co.

"It's a natural place to take profits for hedge funds and other short-term traders."

The Nasdaq, made up shares in technology firms and other companies with high growth potential, was the most potent symbol of the 1990s internet and telecoms boom.

The index soared as investors rushed to put money into "new economy" stocks, peaking at 5,132 in March 2000.

Boom and bust

But it nosedived over the next two years as the boom turned to bust, bottoming out at 1,108 in October 2002.

It has since clawed part of the way back, helped by a recovery in the fortunes of tech giants such as Intel, and dot.com survivors such as Amazon.

The Dow Jones index of industrial stocks also rose strongly on Wednesday, reaching its highest level in 18 months before falling back again.

The Dow settled 0.2% higher at 9,873, within striking distance of its own symbolic target of 10,000.