The Nasdaq Is Up in 2020

By Nicholas Jasinski |  Thursday, May 7

Relative Gains. Believe it or not, but as of today's close, the Nasdaq Composite Index is up on the year. After adding 1.4% today for its fourth-straight gain, the index is higher today than it was to start 2020.

It has had quite a roller-coaster ride in the meantime. After setting its latest record high on Feb. 19, up over 9% in 2020, the Nasdaq tumbled with the rest of the market, falling 30% in just over a month. It then roared back 31% in just the past six weeks, to close at slightly under 8,980 points today, up 0.08% in 2020.

A less-than 0.1% year-to-date gain isn't much, for sure. But the environment, economy, and outlook for corporate earnings could hardly be more different today than when 2020 opened. Still, the hypothetical investor who bought the index at the close on Dec. 31, 2019 and held it since is richer from the trade—even if it may have cost them some hair.

The rebound has as much to do with investors' recent buying enthusiasm as it does with the Nasdaq Composite's unique composition. It includes over 3,000 companies that trade on the Nasdaq. Nearly two-thirds of the combined revenue of those companies comes from either technology or health-care sub-industries, according to FactSet. That compares with about 43% for the S&P 500.

Needless to say, those tech and health-care revenues have held up better than consumer cyclical, finance, or industrial revenues during the coronavirus pandemic and ensuing wave of lockdowns. And stock performance has followed.

The Dow Jones Industrial Average rose 0.9% today, to remain down 16% in 2020, while the S&P 500 added 1.2%, cutting its loss to 11% on the year.

Eric Savitz has more on the factors behind the Nasdaq's swift recovery in 2020 at barrons.com.