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 Wall Street ended 2013 with its positive momentum intact, advancing
in its final trading day of the year on the back of positive
consumer confidence data.
The S&P 500 rose 29.6 percent over the year, its best annual
performance since 1997, while the Dow climbed 26.5 percent in its
best year since 1995. The Nasdaq jumped 38.3 percent, its best year
since 2009.
Both the Dow and the S&P 500 finished the final trading day of 2013
at record closing highs.
In a sign of improving sentiment, the CBOE Volatility Index <.VIX>
or VIX fell 23.9 percent over the year, the biggest annual drop for
the so-called "fear index" since 2009.
All 10 S&P 500 sector indexes ended the year with gains as investors
rode the Fed's extraordinary stimulus in a year that had only the
slightest of hiccups. Wall Street even weathered a partial shutdown
of the U.S. government, as well as the recent announcement that the
Fed would trim its monthly bond purchases in response to an
improving economic picture.
"This has been a terrific year, with all the concerns we had in
January (2013) proving unfounded, and with current economic growth
giving us a strong outlook for 2014," said John Carey, portfolio
manager at Pioneer Investment Management in Boston.
Trading volume was once again light in U.S. markets, which will be
closed Wednesday for the New Year's holiday. Still, investors found
reasons to buy after a read on consumer confidence rose more than
expected in December.
The S&P/Case-Shiller composite index of home prices in 20
metropolitan areas gained 0.2 percent in October from September, but
posted the strongest annualized gain in October in more than seven
years.
"There's been a generally positive trend to news, including the
confidence report, which bodes well for conditions next year and
gives us really no reason to sell," said Carey, who helps oversee
$220 billion in assets.
About 63 percent of stocks traded on the New York Stock Exchange
closed higher for the day, while 55 percent of the shares traded on
the Nasdaq ended in positive territory.
The Dow Jones industrial average <.DJI> gained 72.37 points, or 0.44
percent, to end at 16,576.66. The Standard & Poor's 500 Index <.SPX>
advanced 7.29 points, or 0.40 percent, to finish at 1,848.36. The
Nasdaq Composite Index <.IXIC> rose 22.39 points, or 0.54 percent,
to close at 4,176.59.
The Dow also touched an all-time intraday high of 16,588.25 on
Tuesday, while the S&P 500 set a record intraday peak of 1,849.44.
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In the fourth quarter, the Dow rose 9.6 percent, the S&P 500 gained
9.9 percent and the Nasdaq climbed 10.7 percent. In December alone,
the Dow advanced 3 percent, the S&P 500 rose 2.4 percent and the
Nasdaq shot up 2.9 percent. It was the fourth straight monthly rally
for all three.
Gains in the year were led by consumer discretionary stocks, with
the sector index <.SPLRCD> up 40.4 percent. The sectors with the
slimmest gains of the year — telecom <.SPLRCL>, which rose 6.6
percent, and utilities <.SPSMCU>, up 16.5 percent — are both
considered defensive groups.
Among specific names, Netflix Inc <NFLX.O> was the S&P 500's biggest
gainer, soaring 295.6 percent. Newmont Mining <NEM.N> was the
index's biggest loser, falling 50.6 percent in 2013. Only 38 stocks
in the S&P 500 ended the year in the red.
Few investors expect 2014 to deliver the same scale of returns.
According to the most recent Reuters equity poll, the S&P 500 is
seen rising to 1,925 by the end of 2014, which represents an upside
of 4.1 percent from current levels.
In the corporate arena, Hertz Global Holdings Inc <HTZ.N> surged
10.5 percent to close at $28.62 after the company said it had
adopted a one-year shareholder rights plan in response to "unusual
and substantial activity" it has observed in its shares.
Marvell Technology Group Ltd <MRVL.O> jumped 4.5 percent to end at
$14.38 after private equity firm KKR & Co LLP <KKR.N> reported a 6.8
percent stake in the chipmaker, according to a regulatory filing.
Twitter Inc <TWTR.N> broke its steep two-day losing streak, gaining
5.2 percent to close at $63.65. The stock's price had tumbled 17
percent between Thursday and Monday.
About 4.31 billion shares traded on all U.S. platforms, according to
BATS exchange data, well below the December average of 5.89 billion
shares.
(Editing by Jan Paschal)
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