Nasdaq breaks one-day stock increase record

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    By Bryan Fife

    The Nasdaq Stock Market reached its largest one-day percentage increase in history when it closed on May 30.

    According to the Nasdaq’s Web site, the Nasdaq Composite rose 254 points to reach 3459, an increase of 7.9 percent. The previous one-day percentage increase record was 7.34, set on Oct. 21, 1987.

    Reuters reported that Semiconductor stocks were responsible for a majority of the Nasdaq’s gain.

    Standard & Poor’s Web site reported that for every 13 stocks in the Nasdaq that fell, 27 stocks gained.

    Hal Heaton, a business management professor at BYU, said although the Nasdaq had a great day, today’s record is just a normal fluctuation in the market. The Nasdaq was due for a comeback, said Heaton.

    Heaton said today’s gain didn’t bring the Nasdaq Composite Index anywhere close to where it was earlier this year. The index reached 5048 in March.

    Heaton said that the volume traded on the Nasdaq on Tuesday, May 30 was about half of what it usually is. Normally this market trades a volume of 2 billion shares per day, but Tuesday the market was close to trading only 1 billion shares, Heaton said.

    According to Heaton, the low trading volume means that a significant number of investors are waiting until the investing environment is safer.

    Investors are worried that the Federal Reserve will continue to raise interest rates so they are waiting to see what “the Fed” will do to interest rates in their next meeting in about a month, said Heaton.

    According to Heaton, Investors are also concerned that many tech stocks in the Nasdaq are still overvalued.

    Since the Nasdaq’s decline in the past 90 days a few “.com” stocks have gone bankrupt and some are working with negative cash flow said Heaton. As these types of overvalued company’s continue to “bite the dust,” the Nasdaq will correct itself and more people will invest said Heaton.

    The Nasdaq Stock Market was established in 1971, and is the fastest growing stock market in the United States.

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