Fueled by easy capital and the promise of big productivity gains, companies went on a capital-spending spree in the late 1990s. But the boom left many saddled with overcapacity and slim profits.
High-tech companies reaped much of the benefits of the investment boom and were Wall Street darlings. Now that the bubble has burst, they must retrench.
With nearly half of American households owning shares, soaring stock prices fueled the New Economy wealth effect. Now, as stocks crash, investors could cut spending.
The boom triggered an explosion in venture-capital financing and a burst of innovation. But with share prices plunging, scarcer venture capital could drain the New Economy's entrepreneurial wellspring.