NASDAQ Surges Higher than Tech Bubble in 2000

NASDAQ Hits Record HighThe NASDAQ Composite Index closed above 5,000 on Thursday, June 18th. This marks the second time the market barometer closed above that level since the technology bubble burst in 2000.

The NASDAQ gained 1.34% in Thursday’s trading, closing at 5,132.95. The index hit an intraday high of 5,143.32, surpassing its previous all-time high of 5,132.52 during the tech bubble in March 2000.

Part of Thursday’s increase comes from biotech stocks. Shares of Celgene Corporation (NASDAQ/CELG) surged 4.24% to $116.92. Regeneron Pharmaceuticals, Inc. (NASDAQ/REGN) gained 2.94%, bringing shares to $527.97. Vertex Pharmaceuticals Inc. (NASDAQ/VRTX) increased 2.89% to $128.00. Moreover, the iShares Trust – iShares NASDAQ Biotechnology ETF (NASDAQ/IBB), which tracks stocks in the industry, rose 3.09% to $377.90.

The background for Thursday’s gain is the Federal Open Market Committee’s interest rate decision from one day ago. The result of the meeting suggested that the Federal Funds Rate would be kept at its current level. However, the Fed is now expecting two rate hikes in the remainder of this year.

Markets are loving the Fed’s decision not to raise interest rates in June. This is in part because a rise in the Federal Funds Rate would result in increases in all kinds of other interest rates. The amount of lending would be affected and so would the exchange rate of the U.S. dollar.

Last year, the Federal Reserve gradually ended the quantitative easing program, and investors have been wondering if the U.S. economy can handle higher interest rates. Although the Fed is expecting rate hikes later in the year, so far the market is just enjoying what it can enjoy for now.

U.S. Stock Market: Great Place for IPOs

Recently, the U.S. stock markets have proven to be a great place to take a company public. On Thursday June 18th, Fitbit Inc. (NYSE/FIT) listed its shares on the New York Stock Exchange and enjoyed a 48.40% increase in its share price on the first day of trading. Univar Inc. (NYSE/UNVR) also had its IPO on the same day, gaining a sizeable 15.45% to $25.40 per share.

Companies are taking advantage of the hot stock market. In the remainder of this month, there are more than a dozen companies yet to go public. One of them is TransUnion, who plans to debut its shares on June 25th under the ticker symbol “TRU” on the New York Stock Exchange. Priced between $21.00 and $23.00 per share, the company expects to raise more than $780 million in the IPO.