New Years Day Sales
January 1, 2011 by staff
New Years Day Sales, (AP) – Stock indexes were mixed Friday in quiet trade New Year’s Eve. The last day of the year in contrast with a sometimes harrowing year 2010. Despite investor concerns about the U.S. economy, the ability of European countries in default on debt, Standard & Poor’s 500 and the Dow Jones Industrial Average are both up about 14 percent for the year, including including dividends. The NASDAQ composite, meanwhile, increased about 18 percent for the year after dividends.
In trading Friday noon, the Dow Jones industrial average gained 3 points, or less than 0.1 percent, to 11,573. The Standard & Poor’s 500 rose less than one point in 1258. The NASDAQ composite index plunged 9, or 0.3 percent, to 2654.
The Dow is poised to finish the year at its highest level since August 2008, before the height of the financial crisis. The S & P could rise to its best December in 20 years.
The numbers hide the fact he was a year of rock. Stocks plunged in the spring, after Greece demanded an emergency evacuation to address the debt crisis. That the concerns rose about issues of debt in other European countries, including Ireland, who needed a rescue package later this year.
May 6 crash flash “that sent the Dow lost nearly 1,000 points in less than half an hour, also shook investors. The Dow was down 14 percent from a peak of 11,205.03, April 26 at its lowest level of 9686.48 on July 2.
But stocks came back in the last part of the year after the Federal Reserve announced a program of peace and 600 billion purchase obligations at lower interest rates and stimulate the economy. Bond yields have reached low levels not seen since the 1950s.
The yield on the note of 10-year Treasury reached an annual record of just under 4 percent in April, and then plunged as low as 2.38 percent in October. This has contributed to historically low mortgage rates with 30 years fixed rate loans to a minimum of 4.17 percent in early November.
“It was a market that needed stimulus and responded by a miracle,” said Quincy Krosby, the chief market strategist at Prudential. “The fundamentals of the companies were clearly excellent, but to get the boost the market needed to operate it must be more buyers.”
Investors were also encouraged by an extension of tax cuts of the Bush era and the improvement of economic reports on unemployment, retail sales and consumer confidence, suggesting that the Americans began to spend again. In late December, investors began moving money into equity funds in the United States after the sale for each week since May.
If the gains continue in 2011 will depend on a better job market, consumers are more confident and the ability of companies to make more money from higher income rather than cost reduction.
Many on Wall Street are optimistic that the bull market will not end next year.
“All economic indicators point to stronger growth next year,” said Peter Cardillo, chief economist at New York-based brokerage Avalon Partners Inc.
Consumer discretionary stocks in the S & P 500 rose 26 percent this year, making them the best results of the 10 industry groups in the index. Health care and utilities were the worst performers, rising less than 1 percent for the year.
The Russell 2000 index, consisting of small-cap stocks had the best overall performance of national stock indices. It returned 27.8 percent in 2010, including dividends.
Copyright © 2011 the Associated Press. All rights reserved.
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