A big year for stocks: Dow gains 7%, S&P 13%, Nasdaq 16%
Sun-Times Staff December 31, 2012 8:54AM
Traders work on the floor at the New York Stock Exchange in New York, Monday, Dec. 31, 2012. The stock market struggled for direction Monday morning after five days of losses, with the "fiscal cliff" just hours away and lawmakers yet to reach a solution. (AP Photo/Seth Wenig)
Updated: February 2, 2013 6:15AM
Despite a volatile year that included losses five of the last six trading days brought on by fiscal cliff worries, the Standard & Poor’s 500 and Nasdaq both ended 2012 showing double-digit gains for the year, and the Dow also ended higher.
It was the fourth straight positive year for stocks despite a struggling U.S. economic recovery and debt and recession worries in Europe.
As hopes rose Monday for a fiscal cliff deal, the Dow shot up 166.03 points to end the day at 13,104, up 7.3 percent for the year. The Dow has risen six of the last seven years, according to S&P Dow Jones Indices.
The S&P 500 rose 23 Monday to end the year at 1,426, up 13 percent and beating the 7.8 percent average annual gain of the past 20 years.
Meanwhile, the technology-laden Nasdaq rose 59 Monday to close at 3,019, up 16 percent for the year.
Stocks are in a bull market, “although it might not feel like it to most people,” contended Paul Larson, chief equities strategist for Chicago-based Morningstar Inc., who added data indicate most stocks are slightly undervalued going into 2013.
As for 2012, “A lot of the gains this year were front-end loaded,” he said, noting stocks posted the year’s gains by April, but have struggled to remain steady since.
“It’s been a rough last eight or nine months,” Larson said.
The year saw highs and lows. The biggest gain came June 6. The Dow jumped 287 points on hopes that European officials would find ways to ease the region’s debt crisis, launching a rally.
The biggest drop — 313 points — came Nov. 7, the day after the presidential election. Investors worried that a divided government wouldn’t reach deal on the budget in time to avoid across-the-board government spending cuts and tax increases by the new year.
Some of the best-performing stocks for the year were those that were making up for deep losses in 2011. Homebuilder PulteGroup nearly tripled in value after falling for five of the previous six years. Appliance maker Whirlpool and Bank of America more than doubled over the year, after falling by double-digit percentages in 2011.
Apple, probably the year’s most talked-about company, helped lead the Nasdaq higher. The popularity of the iPhone and iPad led to staggering sales growth that helped push Apple’s stock up 48 percent to almost $600 at the end of March. Apple also announced a dividend and overtook Exxon Mobil as the U.S.’s most valuable company. The stock finished the year up more than 31 percent.
Some of the worst stock performers of 2012 were Best Buy, Hewlett-Packard and J.C. Penney. All are struggling to keep up with competitors who have adapted more quickly to changing technologies and customer tastes. They were all up for the day, but were all down at least 44 percent for the year.