Major U.S. stock indexes closed lower on Friday as risk appetite waned on New Years Eve, but the S&P 500, Dow Jones Industrial Average and Nasdaq Composite all ended the month, quarter and the year with gains despite the pandemic.
Read: Is the US stock market closed on Friday for New Year’s Eve? No. It’s not even closed on Mondays. Here’s why!
How Do Stock Indices Trade?
The Dow Jones Industrial Average DJIA,
lost 59.78 points, or 0.2%, to close at 36,338.30.
The S&P 500 SPX,
slipped 12.55 points, or 0.3%, to end at 4,766.18.
The Nasdaq COMP Composite Index,
lost 96.59 points, or 0.6%, to end at 15,644.97.
On Thursday, the Dow Jones index closed down 90.55 points, or 0.3%, at 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 lost 24.65 points to 15,741.56, a loss of 0.2%.
For the week, the Dow Jones was up 1.1%, the S&P 500 was up 0.9%, and the Nasdaq was down around 0.1%. In December, the Dow Jones gained 5.4%, the S&P 500 climbed 4.4% and the Nasdaq edged up 0.7%. All three benchmarks also posted gains for the fourth quarter, with the Dow Jones rising 7.4%, the S&P 500 jumping 10.7% and the Nasdaq advancing 8.3%.
For 2021, the S&P 500 climbed 26.9%, beating both the 21.4% rise in the Nasdaq and the 18.7% rise in the Dow Jones.
What drove the market?
Major U.S. stock indices fell in the last trading session of the year, as market participants closed their trading logs for 2021, but the S&P 500 and Dow Jones remained below 1% of their record highs. They also recorded their best annual gains since 2019, before the pandemic disrupted daily life across the world.
âToday should be a relatively calm day,â said Matthew Bartolini, head of SPDR Americas Research at State Street Global Advisors, in a telephone interview on Friday morning. Trading is limited, he said, with âother market movementsâ likely to occur towards the end of the day as investors closed their positions for the year.
Thinner holiday volumes meant potential instability in the stock in the final session of 2021, after a strong start to last week in December, as investors assessed the way forward for markets, a path that has been colored by a global pandemic that has already lasted about two years.
Despite recent declines, the Dow Jones and S&P 500 posted record closes this week, with the rise in equities supported by the belief that disruptions from the omicron variant that causes COVID-19 will not be sustainable.
The seven-day average of COVID-19 cases in the United States rose at a parabolic rate to 344,543 on Thursday, from 301,477 on Wednesday, about four times more since December 1 and 37% above the daily peak January 2021 from 251,232, according to a New York Times tracker. Hospitalizations also continued to climb, but at a slower pace, with the daily average reaching 81,847 on Thursday.
Airlines companies canceled hundreds of flights on Thursday due to labor shortages after thousands of people were cleaned up over Christmas weekend, while the Federal Aviation Administration warned of possible virus-related delays at the agency. Additionally, the Centers for Disease Control and Prevention has recommended that Americans avoid going on cruises, whether or not they are vaccinated.
JPMorgan Chase & Co. is a leading bank that has offered its employees the option of working from home to start 2022. The central bank managed by Jamie Dimon “allows more flexibility in the first two weeks of January to work at residence. (if your role allows it) at the discretion of your manager â 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 would be relaxation of restrictions. In the United States, as daily COVID cases hit an all-time high, the CDC has said hospitalizations or deaths from omicron are relatively low. And White House medical expert Anthony Fauci said he was waiting the omicron epidemic peaked in late January.
No release of US economic data was expected due to the New Years holiday, and the bond market closed an hour earlier at 2 p.m. EST on Friday.
The strong performance of the U.S. stock market in 2021 was driven by growth in corporate earnings, State Street’s Bartolini said, with the S&P 500 Index marking a third consecutive year of double-digit gains.
âI think everyone just wants to end the year on a high note,â he said. âMarket returns aside, it’s been a pretty hectic year.
Which companies were the center of attention?
- Advanced Micro-Appliances Inc. AMD said Thursday that its acquisition of another semiconductor company Xilinx inc. XLNX would not close by the end of 2021, but it expects the deal to be done early in the new year. Shares of AMD and Xilinx closed 0.9% lower on Friday.
Actions of Zepp Health Company. ZEPP remained stable, after the Chinese smart health technology company slashed its fourth-quarter revenue outlook, citing “larger-than-expected effects from COVID” and a more persistent global semiconductor shortage.
The UK Medicines and Health Products Regulatory Agency has said it has approved PfizerPFE’s oral antiviral Paxlovid for people with mild to moderate COVID-19 who have at least one risk factor for developing serious illness. Pfizer shares rose 1.1%.
How did the other assets behave?
The yield on the 10-year T-bill TMUBMUSD10Y was trading around 1.496%, marking its biggest annual rise in yield since 2013.
The ICE US Dollar DXY Index, a measure of the currency against a basket of six major rivals, fell 0.3%.
Oil futures fell, with West Texas Intermediate crude for February delivery CLG22,
down 2.3% to $ 75.21 per barrel. WTI CL00,
increased by more than 55% in 2021, its largely annual gain in 12 years.
GC00 gold futures for February delivery GCG22 rose 0.8% to $ 1,828.60 an ounce on Friday. The precious metal fell 3.6% in 2021.
Bitcoin BTCUSD rose 1.7% to $ 47,985.
The FTSE 100 UKX,
fell about 0.2% on Friday, but ended the year with gains of 14.3%. The Stoxx Europe 600 SXXP,
fell 0.2% on Friday and posted gains of around 22.2% for 2021.
In Asian trading, the Shanghai Composite SHCOMP on Friday closed 0.6% higher, posting a gain of 4.8% for the year. The Hang Seng HSI index climbed 1.2% on Friday, but remained down 14.1% for the year. China’s CSI 300,000,300 posted a 0.4% lead on Friday, but lost 5.2% for the year. The NIKKEI 225 index gained 4.9% in 2021, with the Japanese market closed on Friday.