Star-Bulletin news services
Stocks mixed on final day
after year of strong gains
NEW YORK >> Wall Street closed a remarkable year on a quiet note yesterday as investors collected some of the solid gains from the stock market's first winning year since 1999.
Stocks barely budged, but that didn't take away from their recovery from the grueling three-year bear market. In 2003, the Dow Jones industrials closed up 25.3 percent, the Nasdaq composite surged 50 percent, and the Standard & Poor's 500 gained 26.4 percent.
"You can't help but be impressed how much stocks moved this year," said John Caldwell, chief equity strategist for McDonald Financial Group. "It was in response to a stronger-than- expected economy and earnings growth. We're seeing the fruits of companies' labor as they scaled back operations."
"The question is how much of the stock market gains already account for that" as investors look to 2004, he said.
The Dow closed up 28.88, or 0.3 percent, at 10,453.92, its highest level since March 21, 2002. The broader market was mixed. The Nasdaq fell 6.51, or 0.3 percent, to 2,003.37. The S&P 500 rose 2.28, or 0.2 percent, to 1,111.92.
Declining issues narrowly beat advancers on the New York Stock Exchange. Volume was very light.
The Russell 2000 index, which tracks smaller company stocks, fell 8.56, or 1.5 percent, to 556.91.
The NYSE composite index rose 20.40, or 0.3 percent, to 6,464.00. The American Stock Exchange composite index slipped 1.64, or 0.1 percent, to 1,173.55.
The two-year note was unchanged at 100 332, with its yield falling 1 basis point to 1.82 percent. The 10-year note rose 332 to 100 1/32, with its yield declining 1 basis point to 4.25 percent.
In the end, the three main stock gauges had their best annual performance in years, with the Dow notching its strongest gain since 1996 and the S&P seeing its best since 1998. The Nasdaq had its third best performance ever, behind a 57 percent rise in 1991 and an 86 percent gain in 1999.
For the month, the three main indexes posted a gain, with the Dow up 6.9 percent, the Nasdaq higher 2.2 percent and the S&P up 5.1 percent.
The Labor Department reported yesterday that new jobless claims fell last week by a seasonally adjusted 15,000 to 339,000. It was the third straight week of declines that left claims at their lowest level in nearly three years.
Stocks gained in recent weeks on investor optimism for the strong earnings growth in 2004. But with the main gauges trading at their highest levels in nearly two years, analysts say valuations might be getting a bit high.
"It should be encouraging that folks aren't heading for the doors in terms of a lot of selling pressure," Caldwell said. "That was one of our concerns going into the end of the year. But what happens in January remains to be seen."
In yesterday's trading, Murphy Oil Corp. dropped $2.71 to $65.31 after the oil company lowered its 2004 earnings outlook below Wall Street's estimates. Gainers included Dow component Merck & Co., which rose 70 cents to $46.20, after the drug company filed a new application with the Food and Drug Administration for its Arcoxia pain reliever.
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