NEW YORK: Wall Street closed out a dismal, turbulent year for
stocks on a bright note Monday, but still finished 2018 with the
worst showing in a decade.
After setting a series of records through the late summer and early
fall, major US indexes fell sharply after early October, leaving
them all in the red for the year.
The S&P 500 index, the market’s main benchmark, finished the
year with a loss of 6.2 percent. The last time the index fell for
the year was in 2008 during the financial crisis. The S&P 500
posted tiny losses in 2011 and 2015, but eked out small gains in
both years once dividends were included.
The Dow Jones Industrial Average declined 5.6 percent. The Nasdaq
composite slid 3.9 percent.
Major indexes in Europe also ended 2018 in the red. The CAC 40 of
France finished the year down 11 percent. Britain’s FTSE 100 lost
12.5 percent. Germany’s DAX ended the year in a bear market, down
22 percent from a high in January and 18 percent from the start of
“This has really been a challenging year for investors,” said
Jeff Kravetz, regional investment strategist at US Bank Wealth
Management. “This was really the year that market volatility
returned with a vengeance.”
Wall Street started 2018 strong, buoyed by a growing economy and
corporate profits. Stocks climbed to new highs early, shook off a
sudden, steep drop by spring and rode a wave of tax cut-juiced
corporate earnings growth to another all-time high by September.
Then the jitters set in.
Investors grew worried that the testy US-China trade dispute and
higher interest rates would slow the economy, hurting corporate
profits. A slowing US housing market and forecasts of weaker global
growth in 2019 stoked traders’ unease.
In October the market’s gyrations grew more volatile.
The autumn sell-off knocked the benchmark S&P 500 index into a
correction, or a drop of 10 percent from its all-time high, for the
second time in nine months. A Christmas Eve plunge brought it
briefly into bear market territory, or a drop of 20 percent from
its peak, before closing just short of the threshold that would
have meant the end of the market’s nearly 10-year bull market
“For markets to move higher next year, we’re going to have to
resolve those issues,” Kravetz said.
The risks confronting investors have market strategists along Wall
Street forecasting another turbulent year for stocks in 2019, and
potentially one of the most difficult years for investors since the
bull market began.
On Monday, the S&P 500 index rose 21.11 points, or 0.9 percent,
to 2,506.85. The Dow gained 265.06 points, or 1.2 percent, to
23,327.46. The Nasdaq added 50.76 points, or 0.8 percent, to
6,635.28. The Russell 2000 index of smaller-company stocks picked
up 10.64 points, or 0.8 percent, to 1,348.56. It finished 12.2
percent lower for the year.
Health care stocks paved the way for Monday’s modest gains. The
sector ended the year with a 4.7 percent increase, to lead all
other sectors in the S&P 500. Utilities were the only other
sector to eke out an annual gain, adding 0.5 percent.
Technology companies, a big driver of the market’s gains before
things deteriorated in October, ended the year with a 1.6 percent
loss. Three of the five so-called “FAANG” stocks — Facebook,
Amazon, Apple, Netflix and Google parent Alphabet — ended 2018
lower. Amazon rose 28.4 percent, while Netflix jumped 39.4
Energy companies fared the worst, plunging 20.5 percent for the
year, as the price of US crude oil tumbled around 40 percent from a
four-year peak of $76 a barrel in October.
US-China trade truce sends US stocks solidly higherUS stocks fall
amid lingering trade war unease
Source: FS – All-News-Economy
US stocks end dismal, volatile year on a bright note