The S&P peaked at about 1,500 when the Nasdaq Comp peaked at 5,048 in March 2000 and a year later the S&P stood at 1,142 but the Nasdaq had crashed to 1,598. But go under the hood and look at some key non-tech components. Bristol-Myers (BMY) was at $45 when the Nasdaq comp topped out and it was at $59 a year later. Coca-Cola (KO) rallied from $22 at the peak of the Nasdaq in March of 2000 to $31 by the end of the year. Merck (MRK) went from $56 that topping week to $89 at year end and Pfizer (PFE) moved from $33 to $43 in that same March-to-January period. Astoundingly, within four months of the peaking of the Nasdaq, Pfizer rallied from $33 to $48.
General Mills (GIS) went from $16 that week to $23 a year later. Procter & Gamble (PG) rallied from $28 that top week to $44 by year end. Colgate (CL) was $21 that week and $32 year end. The large banks stayed roughly in place during that S&P selloff. The industrials blossomed, with Caterpillar (CAT) running from $18 to $24 from March of 2000 to the end of the year. 3M (MMM) went from $41 at the Nasdaq peak to $60 at year end and United Technologies (UTX) rallied from $25 to $39 at year end. Boeing (BA) went from $33 to $65 and General Electric (GE) moved from $44 to $48 during that same period. Alcoa (AA) went from $30 that top week to $40 a year later. The oils were fine, with Exxon (XOM) rallying from $37 to $43 by year end and Chevron (CVX) gaining two points from $41 to $43. Conoco (COP) moved from $15 to $22.
The utilities were superb, with American Electric Power (AEP) moving from $28 to $45 and Dominion Resources (D) going from $18 to $33 from the top of the Nasdaq in March to year end. Duke (DUK), more of a growth utility, went from $42 to $68 and ConEd (ED) went from $28 to $36. Telcos were strong, with AT&T (T) going from $40 to $50 and Verizon (VZ) rallying from $46 to $50.
The classic growth stocks had terrific moves that were obscured by the larger, tech-dominated S&P. Consider that Nike (NKE) doubled from $7 to $14 from the Nasdaq top until the end of the year. Remember the Comp went from 5,048 to 1,660 during that Nike rally. Starbucks (SBUX) advanced 22% from the Nasdaq top until year end. United Health (UNH) rallied 110% during that period. McDonald's (MCD) advanced 10%. Disney (DIS) declined a couple of points off of a $34 basis. Even retail did fine. Wal-Mart (WMT) moved from $51 to $54 by year end, Target (TGT) from $32 to $35, Costco (COST) was unchanged and Home Depot (HD) dropped from $55 to $51, hardly catastrophic.
I am only being this exhaustive because so many people are telling me that the Nasdaq high fliers simply have to bring down the rest of the market. But, if anything, you see that the Nasdaq cause -- the collapse -- had the effect of boosting all other sectors. But the S&P 500 was so dominated by techs that you can't see it from the charts. It is vital that you know this because it is pretty much exactly what has happened, with the utilities, or could be happening with all the rest of the non-tech market, especially the industrials, but perhaps the non-tech growth stocks, too.
I can't stress enough how important this dichotomy is in part because no one is talking about it and in part because I have not seen this empirical work done elsewhere. I have only heard fear mongering and anti-historical diatribes from pundits and bears galore, who must be seriously underinvested in the non-tech part of the tape.