The New York Stock Exchange operates during normal business hours in the Financial District, Wednesday, Oct. 13, 2021, in New York. Stocks are inching higher in early trading Friday, Dec. 31, the final day of what turned out to be another big year on Wall Street. (AP Photo/John Minchillo, File)
By Alex Veiga
Stocks capped a quiet day of trading with modest losses Friday, even as Wall Street closed the books on another banner year.
The S&P 500 finished with a gain of 26.9% for the year, or a total return of about 29%, including dividends. That’s nearly as much as the benchmark index gained in 2019. The Nasdaq composite, powered by Big Tech stocks, climbed 21.4% in 2021. The Dow Jones Industrial Average gained 18.7%, with Home Depot and Microsoft leading the way.
“It’s the third year in a row of incredible gains,” said J.J. Kinahan, chief strategist with TD Ameritrade. “The market itself was just amazingly strong.”
A wave of consumer demand fueled by the reopening of economies pumped up corporate profits more than expected in 2021, which helped keep investors in a buying mood. The Federal Reserve and other central banks also helped prop up the market by keeping interest rates extremely low, which makes borrowing money more affordable for both companies as well as consumers.
There was also intense interest in so-called “meme stocks,” in which large groups of individual investors bought up shares of beaten-down companies like GameStop and AMC Entertainment, causing institutional investors like hedge funds to lose billions.
Along the way, the S&P 500 set 70 all-time highs, its most recent one on Wednesday. In the post-World War II era, that’s the most new highs for the index since the 77 it set in 1954.
The market kept setting new highs despite plenty of challenges, including rising inflation, global supply chain disruptions and outbreaks of more contagious variants of the COVID-19 virus.
“Although there are a lot of things that people were nervous about all year and continue to be nervous about as we head to ’22, at the end of the day the U.S. (stock) market still seems to be the best game in town,” Kinahan said.
Still, the fast-spreading omicron variant and the looming end of the Federal Reserve’s easy-money policies in 2022 are overhangs for investors going into the new year.
Trading was very slow Friday, with most of Wall Street on vacation and many fund managers already closed out of their positions for 2021.
The major indexes spent much of the day flipping between small gains and losses. The S&P 500 fell 12.55 points, or 0.3%, to 4,766.18. The Dow slid 59.78 points, or 0.2%, to 36,338.30. The Nasdaq fell 96.59 points, or 0.6%, to 15,644.97.
The Russell 2000 index of smaller companies slipped 3.48 points, or 0.2%, to 2,245.31. The index ended the year with a gain of 13.7%.
The yield on the 10-year Treasury note held steady at 1.51% after the bond market closed at 2:00 p.m. Eastern ahead of the New Year’s Day holiday.
Nvidia on Wednesday became the first public company to reach a market capitalization of $5 trillion. The ravenous appetite for the Silicon Valley company’s chips is the main reason that the company’s stock price has increased so rapidly since early 2023.
Chris Williamson, Chief Business Economist at S&P Global, breaks down September’s CPI print and inflation trends, explaining what it means for markets.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
