U.S. stocks end lower on New Year's Eve, but S&P 500, Dow, Nasdaq score big gains for 2021

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By Christine Idzelis and Mark DeCambre

S&P 500 gains about 27% this year, its best yearly advance since 2019

Major U.S. stock indexes closed lower Friday, as risk appetite waned on New Year’s Eve, but the S&P 500, Dow Jones Industrial Average and Nasdaq Composite all closed out the month, quarter and year with gains despite the pandemic.

Read:Is the U.S. stock market closed on Friday for New Year’s Eve? No. It isn’t even closed on Monday. Here’s why!

How did stock benchmarks trade?

On Thursday, the Dow closed down 90.55 points, or 0.3%, to 36,398.08, the S&P 500 index fell 14.33 points, or 0.3%, to close at 4,778.73, the Nasdaq Composite Index declined 24.65 points to 15,741.56, a 0.2% loss.

For the week, the Dow logged a 1.1% gain, the S&P 500 rose 0.9% and the Nasdaq shed about 0.1%. For December, the Dow gained 5.4%, the S&P 500 climbed 4.4% and the Nasdaq edged up 0.7%. All three benchmarks also booked gains for the fourth quarter, with the Dow climbing 7.4%, the S&P 500 jumping 10.7% and the Nasdaq advancing 8.3%.

For 2021, the S&P 500 soared 26.9%, beating both the Nasdaq’s 21.4% rise and the Dow’s 18.7% climb.

What drove the market?

Major U.S. stock indexes fell in the final trading session of the year, as market participants closed out their trading logs for 2021, but the S&P 500 and Dow remained less 1% off their record highs. They also scored their best yearly gains since 2019, before the pandemic disrupted daily life across the globe.

“Today should be a relatively quiet day,” said Matthew Bartolini, head of SPDR Americas Research at State Street Global Advisors, in a phone interview Friday morning. Trading is thin, he said, with “more market movements” potentially coming toward the end of the day as investors closed out their positions for the year.

Thinner holiday volumes meant potential choppiness in the action in the final session of 2021, following a strong start to the past week of December, as investors assessed the path ahead for markets, a path that has been colored by a global pandemic that already has lasted about two years.

Despite recent dips, both the Dow and the S&P 500 posted record-high closes this week, with the rise for equities supported by the belief that disruptions from the omicron variant that causes COVID-19 won’t be lasting.

The seven-day average of COVID-19 cases in the U.S. has risen at a parabolic pace to 344,543 on Thursday, up from 301,477 on Wednesday, which is up about fourfold since Dec. 1 and 37% above the January 2021 daily peak of 251,232, according to a New York Times tracker. Hospitalizations also kept climbing, but at a slower pace, as the daily average reached 81,847 on Thursday.

Airlines canceled hundreds of flights Thursday because of labor shortages after thousands were scrubbed during the Christmas weekend, while the Federal Aviation Administration warned of possible delays tied to the virus at the agency. Also, the Centers for Disease Control and Prevention has recommended that Americans avoid taking cruises, whether they are vaccinated or not.

JPMorgan Chase & Co. is one prominent bank that has offered its employees the option of working from home to start 2022. The money-center bank run by Jamie Dimon is “allowing for more flexibility during the first two weeks of January to work from home (if your role allows) at your manager’s discretion,” Bloomberg reported, citing a Thursday memo to employees.

However, in South Africa, where the omicron variant of COVID was first identified, the government said the country’s latest viral wave had subsided and it would be easing restrictions. In the U.S., while daily COVID cases soared to a record high, the CDC said that hospitalizations or deaths as a result of omicron are comparatively low. And White House medical expert Anthony Fauci has said that he is expecting the omicron outbreak to peak by the end of January.

There was no U.S. economic data scheduled for release due to the New Year’s Eve holiday and the bond market closed an hour earlier at 2 p.m. Eastern Time on Friday.

The U.S. stock market’s strong performance in 2021 has been driven by corporate earnings growth, said State Street’s Bartolini, with the S&P 500 index scoring a third straight year of double-digit gains.

“I think everyone just kinda wants to close out the year on a good note,” he said. “Market returns aside, it’s been quite a turbulent year.”

-Christine Idzelis

Which companies were in focus?

How did other assets fare?

 

(END) Dow Jones Newswires

12-31-21 1703ET

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