The U.S. stock market just ended the year almost precisely unchanged. Wall Street closed its last trading day of the year pretty much where it started, while stock markets in Europe and Asia finished steeply lower. Concern over Europe’s debt crisis overshadowed optimism that the U.S. economy will expand in 2012.
On the final trading day, Friday, Dec. 30, 2011, the Standard & Poor’s 500-stock index closed at 1,257.60 with a 0.4 percent loss for the day. The S&P 500, a benchmark index for the U.S. broad equity market, statistically unchanged for the year, from 1,257.64 on Dec. 31, 2010 to 1,257.60 on Dec. 30, 2011, which is just 4 ticks difference or a decline of 0.003% for the year.
Meanwhile the Dow Jones industrial average fell 0.6 percent on the final day and was up 5.5 percent for the year, closing at 12,217.56.
The S&P 500 capped its smallest annual change since 1947. The index
started the year with a rally, rising as much as 8.4 percent to a
three-year high by the end of April and extending its rebound from a
March 2009 bear-market low to 102 percent.
Throughout the summer as Congress and President Barack Obama struggled over U.S. deficit cuts, the S&P 500 tumbled and sank further amid concern that Europe’s debt crisis was threatening the global economic recovery. The index fell as much as 19 percent from April to its low for the year on Oct. 3, which date the S&P 500’s price- earnings multiple reached the lowest level in more than two years, falling to 11.6, a 27 percent decline from its high in February of 15.8.
Major European and Asian stock indexes, nevertheless, slid down by
double-digit percentages in 2011. The FTSE 100 index of leading British
shares closed down 5.6 percent for the year, while Germany’s DAX ended
14.7 percent lower for the year. The CAC 40 in France closed 17 percent
down for the year. The Nikkei 225 closed down more than 17 percent for
the year, while the Hang Seng Index was down nearly 20 percent.
Financial shares have fallen the most among the 10 main industries in the S&P 500 this year, losing 18 percent as a group, followed by a decline of 12 percent in raw-material producers. Conversely, utilities, consumer-staples providers and health-care companies, among stocks considered the least sensitive to economic prospects, rose at least 10 percent for the top gains.
Trading volumes thinned out during the holiday season, finishing a year of political turmoil and financial upheaval that saw governments overturned and prospects for sovereign defaults sharpen.
The euro zone debt crisis set off volatile swings in equity markets that had investors turning to safer assets; while United States debt, one of the safest assets historically, suffered its first ever downgrade to its AAA credit rating.