Tech Stocks Break Through Dotcom Era Record

Technology stocks surpassed a record set during the peak of the dotcom boom Wednesday, buoyed by better than expected earnings and an ongoing recovery in corporate profits.

The S&P 500 tech sector (SPLRCT) surpassed its high set in March of 2000 during a surge in internet stocks, closing up 5.50 points or 0.56% to 992.29. The index flirted with the milestone in early June, but a drop in tech stocks shortly thereafter dashed those hopes. With technology companies rallying during the last two weeks, the Nasdaq is also marching higher. (For more, see more: Tech Stocks’ Blazing First Half: Will It Continue?)

Tech stocks have been surging all year thanks to a turnaround in the profits of all sorts of companies and optimism that more of the same is to come. While the major technology companies have yet to report earnings, a strong showing on the part of Netflix Inc. (NFLX) is boosting optimism and thus the fortunes of a whole slew of high-tech public companies. Earlier this week the streaming video provider beat Wall Street’s expectations when it announced it added 5.2 million subscribers in the three months ended in June. It had previously forecast 3.2 million subscriber additions for the second quarter.

This comes amid what is typically a slow period for Netflix. Looking out to the fourth quarter the company forecast 4.4 million new subscribers, higher than the 3.1 million analysts were looking for. Microsoft Corp (MSFT) is up next, reporting fiscal fourth quarter results after the close of trading. With the Redmond, Washington software giant focused on the fast growing cloud-computing market and an earnings beat in the third quarter, analysts are expecting a strong showing out of the software giant. (For more, see more: Chinese Tech Stocks Have This Advantage Over U.S. Counterparts.)