Wall Street ends tumultuous year near records

NEW YORK, Dec.31 (Reuters) – Wall Street closed near an all-time high in light trading on Friday, the last trading day of 2021, marking the second year of recovery from a global pandemic.

The three major U.S. stock indexes posted monthly, quarterly and annual gains, their strongest three-year gains since 1999.

Businesses, consumers, and the economy at large greatly prospered in 2021 as they progressed through an ever-changing landscape, including a tumultuous transfer of power marked by the January 6 riot on Capitol Hill. Other factors included the phenomenon of the ‘stock of memes’, new variants of COVID-19, a labor shortage, generous fiscal / monetary stimulus, hampered supply chains, demand for boom and the resulting price spikes.

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“What strikes us this year among all the negatives is the resilience of Corporate America,” said Ryan Detrick, chief market strategist at LPL Financial in Charlotte, North Carolina. “In a sea of ​​uncertainty and higher prices, you must be hugely impressed with the agility and adaptability of US businesses to post 45% profit growth in a very difficult year.”

Indeed, the results of S&P 500 companies exceeded analysts’ estimates to generate year-on-year growth in the first three quarters of the year of 52.8%, 96.3% and 42.6%, respectively. , according to Refinitiv, which currently sees fourth quarter annual profit growth of 22.3%.

Energy (.SPNY), real estate (.SPLRCR) and microchips (.SOX), sectors associated with the economic recovery and growing demand, were among the top performers of 2021, while stocks of growth (.IGX) progressing by 31% easily outperforming 22%. value-added actions (.IVX).

Market-leading tech stocks and tech-adjacent mega-caps, which outperformed the broader market in the first year of the global health crisis, lagged as the economy rolled slowly and vaccines were released. deployed.

The NYSE FANG + Index (.NYFANG), an equally-weighted group of 10 such stocks, rose nearly 20% over the year. Google’s parent company, Alphabet Inc (GOOGL.O) recorded the strongest annual growth among NYSE FANG + constituents, achieving its best year since 2009.

Dow Transports (.DJT), considered by many to be a barometer of economic health, recorded an annual gain of more than 31%.

Steadily rising Treasury yields – along with a recent hawkish turn by the Federal Reserve, which is now forecasting up to three rate hikes in the coming year – have supported interest-sensitive financials ( .SPSY) which gained nearly 33%.

The COVID-19 pandemic, which erupted in early 2020 and caused the steepest and fastest economic contraction in history, continues to linger, putting pressure on travel-related inventories.

The S&P 1500 Airlines Index (.SPCOMAIR) ended 2021 as one of the few losing sectors of the year with an annual decline of almost 2%.

But early data suggests the Omicron variant, which has caused a sharp spike in global infections, is less virulent than its predecessors, and economic data increasingly suggests a return to normal, two years after the first cases of COVID-19 have been reported.

According to preliminary data, the S&P 500 (.SPX) lost 12.63 points, or 0.26%, to finish at 4,766.10 points, while the Nasdaq Composite (.IXIC) lost 94.93 points, or 0.60%, to 15,646.63. The Dow Jones Industrial Average (.DJI) lost 63.07 points, or 0.17%, to 36,335.01.

Of the top 11 sectors in the S&P 500, real estate (.SPLRCR) was the last higher in Friday’s session, with communications services (.SPLRCL) suffering the largest percentage decline.

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Reporting by Stephen Culp in New York and Echo Wang in Taos, New Mexico; Additional reporting by Medha Singh in Bangalore Editing by Matthew Lewis and Lisa Shumaker

Our standards: Thomson Reuters Trust Principles.

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