The First Time…Ever

From the Wall Street Journal, August 27, 2014:

The S&P 500 Index notched its first-ever close above 2000 on Tuesday. It took 16 years to gain 1000 points since breaking through 1000 for the first time in 1998.

In February 1998, excitement about Internet stocks was building, eBay went public that year and Amazon had just made a raucous debut less than a year earlier. Meanwhile, day trading had become a phenomenon. The S&P 500 rose nearly 27% in 1998, marking the fourth consecutive year the index gained more than 20%.

In 1998, “We had a very, very rosy view of the economy…with new technologies being introduced, the optimism was extraordinary,” says Jonathan Golub, chief market strategist at RBC Capital Markets. Investors “underestimated the risks in 1998, and perhaps today things are the exact opposite.” 

“Back in 1998, investors talked about a new economy then, meaning everything was going to be better than it was going to be in the past…Now when they talk about the new normal, or new neutral…the idea is that everything is going to be worse.” Some market observers say the overall lack of enchantment with the stock market could signal more gains ahead as many more buyers come forward.

Back in March 1998, General Electric Co. was the largest company in the index by market value…the biggest stock in the S&P 500 today is Apple Inc.