Posted on: Saturday, February 2,2002

Dow tops Nikkei for first time since 1957

By William Pesek Jr.
Bloomberg News Service

TOKYO — The year was 1957. Russia launched Sputnik, Dwight D. Eisenhower was in the White House, Elvis swiveled his hips in "Jailhouse Rock," and the Dow and the Nikkei were at level pegging.

Fast-forward to today. After following Sputnik into orbit, the Nikkei has crashed back to Earth, closing below the Dow yesterday for the first time in more than 44 years.

The indexes touched briefly last Sept. 12, when the Nikkei plummeted after the attacks in the United States. Wall Street was closed that day because of the disastrous damage just blocks away, and the convergence of two of the world's bellwether stock indexes was lost in the shock of the deadly attacks. By the next day, the Nikkei was back above the Dow.

Yesterday's crossing of the business barometers, far from being a happy one, is inspiring dread in financial capitals. The Nikkei's slide is the latest manifestation of Japan's 11-year economic slump.

The Dow, which has had an anemic two years itself, fell 13 points yesterday to end the week at 9907. The Nikkei did even worse, sliding 206 points yesterday to close at 9791.

Economic history buffs will be transfixed by the novelty of it all. Look at is this way: When the Nikkei peaked at 38,957 on Dec. 12, 1989, the Dow Jones reached a intraday high of 2753. Since then, the Nikkei has plunged to less than a quarter of its value while the Dow has quadrupled.

Or how about this? The last time the Nikkei closed below the Dow, Japan's octogenarian Finance Minister Masajuro Shiokawa was a sprightly 36-year-old, a decade away from his first parliamentary seat, and U.S. Treasury Secretary Paul O'Neill was a 22-year-old engineer at Morrison Knudsen Corp.