Dot-Com Bubble Peak: Nasdaq Closes at 5,048.62 on March 10, 2000

The dot-com bubble peaked on Friday, March 10, 2000, when the Nasdaq Composite closed at a record 5,048.62. The index, packed with technology and internet stocks, had more than doubled in 12 months, from 2,406.00 on March 10, 1999. Over the next 31 months it lost about 78 percent of its value, wiping out trillions of dollars and many of the era’s best-known startups.

The Day the Nasdaq Peaked

The Nasdaq first closed above 5,000 on March 9, 2000, at 5,046.86. The next day it touched an intraday high of 5,132.52 before closing at 5,048.62, a record that would stand for 15 years. Because no later close topped it until 2015, March 10 is the date most often used for the top of the bubble.

How the Nasdaq Got There

The climb accelerated as the internet went mainstream. Closing figures from the Federal Reserve Bank of St. Louis’s FRED database show how quickly the index moved:

Milestone	First close at or above it
1,000	July 17, 1995
2,000	July 16, 1998
3,000	November 3, 1999
4,000	December 29, 1999
5,000	March 9, 2000

It took three years to go from 1,000 to 2,000 and about four months to go from 3,000 to 5,000. In 1999 alone, the index rose from 2,192.69 to 4,069.31, a gain of about 86 percent. At the March 2000 peak it stood almost five times higher than at the end of 1995.

Signs of a Bubble in Early 2000

The mood at the start of 2000 showed how much money was chasing the internet. On January 10, America Online and Time Warner announced a merger that was the largest corporate combination to that point, pairing an internet company with a traditional media giant. Twenty days later, during Super Bowl XXXIV, somewhere between 12 and 19 of the broadcast’s 61 commercials were bought by dot-com companies, depending on how they are counted.

Many of those companies were spending far more than they earned. On March 20, 2000, Barron’s ran a cover story headlined “Burning Up,” warning that internet companies were running out of cash fast. The Federal Reserve, led by Alan Greenspan, raised interest rates the next day, part of a series of increases that made borrowing and speculation more expensive.

How the Dot-Com Crash Unfolded

The decline was not a single crash but a long slide with violent drops along the way. By April 12, barely a month after the peak, the Nasdaq had closed below 4,000 again. Two days later, on April 14, 2000, the Nasdaq fell 355.49 points, nearly 10 percent, to close at 3,321.29. It ended 2000 at 2,470.52, down about 39 percent for the year and roughly half its March peak.

Companies that depended on fresh investor money began to fail. Pets.com shut down on November 9, 2000, only nine months after its initial public offering, and the online grocer Webvan also collapsed. By November 2000, internet stocks had lost about $1.755 trillion in value.

The selling continued through 2001 and 2002, with the index ending those years at 1,950.40 and 1,335.51. The Nasdaq hit its bear-market closing low of 1,114.11 on October 9, 2002, about 78 percent below the March 2000 record. Across the stock market, roughly $5 trillion in value had disappeared by the end of the downturn.

Timeline of the Dot-Com Bubble

• July 17, 1995: Nasdaq first closes above 1,000.
• December 29, 1999: First close above 4,000.
• January 10, 2000: AOL and Time Warner announce their merger.
• March 10, 2000: Record close of 5,048.62.
• March 20-21, 2000: Barron’s “Burning Up” story; the Fed raises rates.
• April 14, 2000: A drop of nearly 10 percent in one day.
• November 9, 2000: Pets.com closes.
• October 9, 2002: Bear-market closing low of 1,114.11.
• April 23, 2015: New record close of 5,056.06.

The 2000 calendar places these dates in context, and the days between dates calculator shows that 5,522 days passed between the March 2000 peak and the April 2015 record.

What the Dot-Com Bust Left Behind

The recovery took about 15 years. The Nasdaq did not set a new record close until April 23, 2015, when it finished at 5,056.06. An investor who bought the index at the top needed that long just to break even on price.

The numbers explain why the episode is still used as a benchmark. From the end of 1995 to the March 2000 peak, the index rose almost fivefold; from the peak to the October 2002 low, it gave back about 78 percent. Much of the money that flowed into young internet companies, including Pets.com and Webvan, was lost when those businesses closed.

The crash also arrived in a year with plenty of other upheaval. The same 2000 calendar includes the Y2K rollover, the first long-term crew on the International Space Station and the disputed presidential election in Florida.