Dow ends 2011 up 5%; S&P 500 finishes flat

The blue chips fall 69 points on 2011's final trading day. The S&P's annual change is its smallest ever. Gold rises as oil slips. McDonald's is the Dow's best performer, while Bank of America is the laggard.

By Charley Blaine Dec 30, 2011 1:59PM
Charley BlaineUpdated at 6 p.m. ET

2011, a year that dismayed investors with frequent gut-wrenching bouts of volatility, produced one last day of losses for investors. Most of the losses came in the last two hours.

The Dow Jones industrials ($INDU) finished the year sporting a 5.5% gain. The Nasdaq Composite Index ($COMPX) closed down about 1.8%. And, amazingly, the Standard & Poor's 500 Index ($INX) ended almost exactly flat. To be precise, the change was four one-hundredths of a point: 1,257.60 compared with 1,257.64 in 2010. The percentage change was 0.0032% and is nearly the index's smallest change -- positively or negatively -- ever.

That the changes for the major averages would be so small may be hard to believe in a year that saw the major averages rise more than 8% by April 29 and then fall 17% or more from those levels by early October.

But there was a silver lining in all of this. U.S. stocks rebounded in the fourth quarter and ended the year holding their own compared with stocks elsewhere. You can't say that in Germany, where the Xetra Dax Index ($DE:DAX) finished down 15%. Or France, where the CAC-40 Index ($FR:PX1) was off 17.3%. Or Canada, where the S&P/Toronto Stock Exchange Index ($CA:OSPTX) looks to end down 11%. Or China, where the Shanghai Composite Index was off 21.7% for the year.

Article continues below.
Here's why we say the S&P 500's change is nearly the smallest ever. The index's change in 1947 was, in fact, zero. But the index was calculated only in two digits. Now it can be calculated out in many digits.

The close meant that the Dow and S&P 500 finished down 0.6% for the week. The Nasdaq was off 0.5%, with the Nasdaq-100 down 0.4%.

The Dow ended December with a 1.4% gain, while the S&P 500 ended up 0.9%. The Nasdaq was off 0.6%, while the Nasdaq-100 dropped 0.8%.

The quarterly gains for the Dow and S&P 500 -- 12% and 11.2% -- were their best since the third quarter of 2009. The Nasdaq's 7.9% gain was its best for a quarter since the fourth quarter of 2010.

During the year, the market had to absorb the effects of the Arab spring, the Japanese earthquake in March, a continued weak U.S. real estate market, a downgrade of U.S. debt in August, massive flooding in Thailand that hurt technology manufacturers and the constant worries about how Europe might solve its debt crisis.

IN 2012, the market faces more Europe, threats by Iran to blockage the Persian Gulf, and the potential of a loud and brutal U.S. election cycle.

Markets for the week



12/30/2011

12/23/2011

% chg.

YTD chg.
Dow Industrials

12,217.56

12,294.00

-0.62%

5.53%
S&P 500

1,257.60

1,265.33

-0.61%

0.00%
Nasdaq 

2,605.15

2,618.64

-0.52%

-1.80%
Russell 2000

740.92

747.98

-0.94%

-5.45%
Crude oil 

$98.83

$99.68

-0.85%

8.15%
(per barrel)











U.S. Dollar Index 

80.52

80.24

0.36%

1.56%
10-yr. Treasury

1.87%

2.03%

-7.83%

-43.39%
Gold

$1,566.80

1,606.00

-2.44%

10.23%

McDonald's, IBM, Pfizer lead the Dow for 2011; B of A lags
This was a year when the sexiest of stocks weren't the big winners.

Among Dow stocks, the three top performers this year were McDonald's (MCD), IBM (IBM) and Pfizer (PFE), which are looking to finish up 30.7%, 25.3% and 23.6%, respectively. The laggards: Bank of America (BAC), down 58.3%; Alcoa (AA), down 43.8%; and Hewlett-Packard (HPQ), down 38.8%.

Among S&P 500 stocks, the winners are Cabot Oil & Gas (COG), El Paso (EP) and Intuitive Surgical (ISRG), up 100.5%, 93.1% and 79.6%, respectively. Laggards are solar-panel-maker First Solar (FSLR), Monster Worldwide (MWW) and Alpha Natural Resources (ANR), down 74.1%, 66.4% and 66%, respectively.

Special mention must be made of Netflix (NFLX), down 60.6%. All of that loss came after July 13, when the company embarked on a plan to split itself in two and double its fees. Consumers hated the move. Investors hated it even more.

Intuitive Surgical led the Nasdaq-100, followed by Alexion Pharmaceuticals (ALXN), up 65%, and Hansen Natural (HANS), up 77.5% and 76.2%, respectively. The big laggard was BlackBerry maker Research In Motion (RIMM), down 75%, followed by First Solar and Netflix.

Apple (AAPL), which was briefly the most valuable company in the world this past summer, finished up 25.6% on the year. Its $376.4 billion market capitalization was second behind Exxon Mobil (XOM) at $406.27 billion. Exxon was up 15.9% on the year.

Treasurys were among the best places to park money. Overall year-to-date total return was about 8.6%. Long-term Treasurys produced a total return of 33%, their best performance since 2008.

The reasons for those fabulous returns were:
  • The Federal Reserve's campaign to keep rates low to boost the economy.
  • The flight to safety for many global investor but especially investors in Europe worried that the euro currency would collapse.
Gold moves up as crude falls back
As stocks slipped, crude oil (-CL) in New York was down a bit. Natural gas (-NG) fell to its lowest levels since 2009. Interest rates were lower. Gold (-GC) and silver (-SI) rallied from Thursday's drubbing.

Gold settled up $25.90 to $1,566.80 an ounce after falling $23.20 on Thursday. Silver was up 60 cents to $27.92, and copper was up 6.7 cents to $3.436 a pound.

For the year, gold was up 10.2% after a runup this summer that peaked with a 33% gain. The metal fell 10.5% in December alone.

The decline was so sharp that, with Thursday's close, the Dow had produced the better total annual return for investors. With Friday's market decline, the Dow is likely to produce a total return of about 8.5%.

Crude oil, meanwhile, settled down 82 cents to $98.83 a barrel. Brent crude was off 57 cents to $107.50 a barrel. For the year, crude oil finished up 8.2% after a 15.2% gain in 2010 and a 78% increase in 2009.

Natural gas was another story, down  3.8 cents to $2.989 per million British thermal units and off a whopping 32% for the year. The close was the lowest since November 2009.

Gas producers have been hurt by too much supply coming onto the market and abnormally warm November and December weather. There is, for example, no snow in the Northeast.

Integrated oil companies like Exxon Mobil and Chevron (CVX) were higher for the year. Chevron was up 16.6%. Natural gas producers like Apache (APA) and Devon Energy (DVN) were off 24% and 21%, respectively.

Spain has a budget problem

It was hard to say whether there was any kind of a catalyst at work Friday. The closest was that Spain announced its budget deficit was approaching 8% of gross domestic product, more than expected. So the country will impose new spending cuts to control the problem.

That offset some optimism about the U.S. economy, which has exhibited some strength of late. Jobless claims have been moving lower. Real-estate markets may be stabilizing. Manufacturing looks fairly strong.

Automakers are expected to report decent sales for December on Tuesday. Ford Motor (F) said it has sold more than 2 million vehicles this year, its best year since 2007. Ford was up 5 cents to $10.73. But it's been a hard year for the company, with shares off 36.1%.

Energy prices -- New York close



Fri.

Thur.

Month chg.

YTD chg.
Crude oil (-CL)

$98.83

$99.65

-1.52%

8.15%
(per barrel)











Heating oil (-HO)

$2.9142

$2.9201

-3.67%

14.57%
(per gallon)











Natural gas (-NG)

$2.9890

$3.0270

-15.80%

-32.15%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.6574

$2.6694

3.87%

8.32%
(per gallon)











Brent crude 

$107.38

$108.01

-2.84%

13.33%
(per barrel)











Retail gasoline

$3.2690

$3.2540

-0.79%

6.41%
(per gallon; AAA)












Moody's cuts Sears' rating
Fitch Ratings cut Sears Holdings' (SHLD) long-term credit rating to CCC from B and kept its outlook negative. The downgrade follows news Tuesday that Sears plans to close up to 120 of its stores after a dismal holiday selling season. Shares fell $1.12 to $31.78.
 
American Airlines parent AMR (AMR) shares were off 17 cents to 35 cents. Late Thursday, the New York Stock Exchange said it was suspending trading in the shares on Jan. 5. The shares aren't meeting the minimum bid requirement. The carrier, which sought bankruptcy protection in late November, expects trading to move to the Pink Sheets after the delisting. AMR is down more than 88% in 2011.
 
Dow component Verizon Communications (VZ) could be the subject of consumer ire as the company reportedly plans to start charging customers $2 per transaction to make one-time bill payments online or over the phone. But investors did not seem worried today. Shares climbed 7 cents to $40.12.

Short hits from the markets -- New York close



Fri.

Thur.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0100%

0.060%

0.00%

-91.67%
5-year Treasury note 

0.830%

0.875%

-12.82%

-58.83%
10-year Treasury note

1.871%

1.897%

-9.53%

-43.39%
30-year Treasury bond

2.889%

2.907%

-5.65%

-33.77%
Currencies











U.S. Dollar Index

80.522

80.911

2.59%

1.56%
British pound

1.5538

1.5413

-0.93%

-0.44%
(in U.S. $)











U.S. $ in pounds

£0.644

£0.649

0.94%

0.44%
Euro in dollars

$1.30

$1.30

-3.44%

-3.00%
(in U.S. $)











U.S. $ in euros

€ 0.771

€ 0.772

3.56%

3.09%
U.S. $ in yen 

77.34

77.63

-0.62%

-4.95%
U.S. $ in Chinese

6.34

6.32

-0.83%

-4.21%
yuan











Canada dollar

$0.983

$0.000

0.14%

-2.08%
(in U.S. $)











U.S. dollar 

$1.019

$1.020

-0.14%

2.13%
(in Canadian $)











Commodities

 

 

 

 
Gold (-GC)

$1,566.80

$1,540.90

-10.48%

10.23%
(per troy ounce)











Copper (-HG)

$3.436

$3.369

-3.90%

-22.73%
(per pound)











Silver (-SI)

$27.9150

$27.3150

-14.90%

-9.77%
(per troy ounce)











Wheat (-ZW)

$6.5275

$6.4525

6.31%

-17.82%
(per bushel)











Corn (-ZC)

$6.4650

$6.38

6.33%

3.86%
(per bushel)











Cotton 

$0.9168

0.9136

0.85%

-36.69%
(per pound)











Coffee

$2.2965

2.2705

-3.06%

-4.51%
(per pound)











Crude oil (-CL)

$98.83

$99.65

-1.52%

8.15%
(per barrel)










 

41Comments
Dec 30, 2011 6:29PM
avatar
I'm curious. How many (other) cynics out there think that the market has been and is being manipulated? Thumbs up if you think it has, thumbs down if you think it has not. I'm just sayin'........
Dec 30, 2011 4:14PM
avatar
The market being so flat today really goes to show how little the average investor (i.e. you and I) matter.  The movement is all high frequency computers and hedge fund douchebags. 
Dec 30, 2011 4:20PM
avatar

Well, Well, Well, Why should today be any different, it's the last day the can SCREW

 us  this Year.

Dec 30, 2011 6:20PM
avatar

PS: love how the commercials start without any prompting on this site while you hunt and peck for a way to stop it.

 

Dec 30, 2011 6:19PM
avatar
Hmmmm, guess the news that Uncle Ben at the Fed (aka Santa to the world) gave away 17 trillion of US taxpayers money to US and international banking cartels and mega corps at zero interest with very little paid back was of no value to MSN-MSNBC-CNBC this week. Of course, all they do on the biz front is carry water for Wall Street anyway so what more could we expect ? What a great xmas present for the next several generations of US taxpayers from Obamination's pet toadie at the Fed. Guess all the big shots at GS celebrated and cut m ore checks for the pols they bought and paid for. Worst government money can buy and both parties are for sale.   
Dec 30, 2011 4:12PM
avatar

Nuad

You are correct that the headlines of this blog do not seem to follow the real news.  Perhaps that is a lack of creativity? 

 

However, if you follow the market trends, along with news of what is really going on in the world, you can see what is causing the market go up and down.

 

Most of the problem seems to be uncertainty with greed and fear built in.  Frankly with the Washington Flip Flop and Lies....what would you expect.  There is NO leadership in Washington only two groups of crooks blaming each other for the problems.

Dec 30, 2011 3:56PM
avatar

They have suckered everyone in. 

 

The big sell off will come next week when no one is paying attention.

Dec 30, 2011 5:08PM
avatar
2008 was a rally year in stocks compared to this year for long term investment!!!! Its been a long time since long term has a gain for the year.
Dec 30, 2011 3:57PM
avatar
Like we said this morning, very low volume and plenty of scumbags, never a positive combination...At about 1415 hrs they called to accelerate the selling and that's all she wrote. They will be selling all the way to the close and go celebrate a great year. Crooks made almost as much money this year as they made in 2008. Oh well, it just shows you that cheating pays on Wall Street. Lets see how next year treats us,,,Everyone have a very Happy and Healthy 2012.
Dec 30, 2011 3:30PM
avatar

Nuad

The big surprise though is that today's headline doesn't include more mention to the European debt situation, with the drop we've seen today.
The European debt is still a problem but if you look at the European Markets and Money Exchange...that is another story.  All except Yen is UP Today. Problem is on the FLOOR OF THE AMERICAN EXCHANGE.  FEAR and GREED.
Dec 30, 2011 6:07PM
avatar
So what's the reason that today was down?  Interested people would like to know Chuck!!!!!!!
Dec 30, 2011 3:18PM
avatar
So, as to this end of the year rally?  The big surprise though is that today's headline doesn't include more mention to the European debt situation, with the drop we've seen today.  Perhaps that story is being saved for recycling inr the New Year, hmm....
Dec 30, 2011 3:53PM
avatar
Yesterdays gain are now gone too!!!
Dec 30, 2011 3:02PM
avatar
International Market seems to be doing OK...it is the US Market that doesn't know what is going on..
Dec 30, 2011 3:36PM
avatar

Wink chin-up people,

 

Some things in life are bad
They can really make you mad
Other things just make you swear and curse.
When you're chewing on life's gristle
Don't grumble, give a whistle
And this'll help things turn out for the best...

And...always look on the bright side of life...
Always look on the light side of life...

 

savvy investors are getting nimble for 2012: some are shorting the long-bond to make money should rates rise; some are re-balancing AWAY from consumer staples/healthcare/u​tilities in a "contrarian strategy" and buying the down beaten sectors such as tech and financial; some have noticed the disconnect between gold above-ground (bullion) and below (the miners) and are thus buying the miners by dollar cost averaging into them on the way down; some are buying TIPs in anticipation of inflation; and many are "keeping their powder dry" with sideline cash ready to pounce on any significant (and likely) market pullback in the first half of 2012.

 

so, do your research and homework, post back and forth with re-tog/havasu/other investors, and be nimble OR hire a fee-only investment manager with a PROVEN track record of success since 1999.

 

be safe out there and Happy New Year!  .... Martini glassPartyClockPartyMartini glass 

Dec 30, 2011 3:33PM
avatar
The markets will now lose at least 6% money wise for the year and make losess equal to 2008!!!
avatar
The year may change a digit but the economic downfall of the USA is not ending...
Dec 30, 2011 7:33PM
avatar
Jay 60 needs to get his information from authoritative sources rather than the entertainers masking as journalists who never had Econ 101
Dec 30, 2011 7:45PM
avatar

McDonalds, the top performer !

 

Welcome to Obama's economy. Less bankers and more burger flippers.

 

Spread that wealth around Barry.

Dec 30, 2011 3:39PM
avatar
Wall Street took back close to half our gains in 2010 this year!
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