US stocks end year with a whimper

Thursday's losses fail to curb good yearly gain for the indices

US stocks ended the final trading day of FY 2009 with a loss. It was mainly lack of participation of majority of traders leading to low volume and lack of any major news flow that led stocks end in the red for the day on Thursday, 31 December 2009. Nevertheless, the major indices managed to end substantially higher for the year with the technology sector being the most out performing sector.

At the end of the day on 31 December, 2009, the Dow Jones Industrial Average ended lower by 120.46 points at 10,428.05. Nasdaq ended lower by 22.18 points at 2269.15. S&P 500 ended lower by 11.32 points at 1115.4. The Dow was trading higher by 48 points higher earlier during the day.

All ten economic sectors ended lower for the day led by utilities, industrials, and material sectors.

For the week, that ended on Thursday, Dow ended lower by 92 points. Nasdaq and S&P500 lost 16.5 points and 11.4 points respectively on a weekly basis.

Investors ignored the encouraging piece of economic data that was scheduled for the day on Thursday. The Labor Department in US reported on Thursday, 31 December, 2009 that initial jobless claims fell 22,000 to a seasonally adjusted 432,000 in the week ended 26 December, 2009. It marked the lowest level since July 2008. The drop in initial claims figure was more than expected. Just nine months ago, claims peaked at 674,000.

The four-week average of initial claims dropped 5,500 to 460,250, the lowest since September 2008. The number of continuing claims, which reflects people who have been collecting state benefits for an extended period, dipped 57,000 to 4.98 million in the week ended 19 December, 2009. The four-week average of continuing claims dropped 122,000 to 5.22 million, the lowest rate since late February.

In the currency market on Thursday, the dollar index, which weighs the strength of dollar against the basket of six other currencies fell against almost all the counterparts. The dollar index settled for a loss of 0.1% after slipping by almost 0.4% earlier during the day.

Crude prices ended higher on Thursday, 31 December 2009, the last trading day of FY 2009. With Thursday's gain, crude prices marked the highest yearly gain in a decade. Prices shot up once again as the economy showed healthy signs of recovery and as dollar weakened.

On Thursday, crude-oil futures for light sweet crude for February delivery closed at $79.36/barrel (higher by $0.08 or 0.1%). Earlier in the day, it rose to a high of $80.05.

Crude ended FY 2009 higher by 78%, the highest yearly gain since 1999. It reached a high of $82 earlier in October this year and hit a low of $33.98 on 12 February 2009. Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 42% since then.

The technology sector remained the best performer in 2009. Large-cap tech issues helped the Nasdaq Composite advance 43.9% this year and outperform its counterparts. S&P 500 finished the year with a 23.5% gain, while the Dow finished 2009, 18.8% higher.

The financial sector also registered good gains for the year, though was not one of the frontrunners among all sectors. Though its yearly gain wasn't as impressive as what was accomplished by other sectors, financials finished the year up approximately 250% from their March low. That spike was attributable to bank stocks, which rallied after liquidity fears faded.

Barring HDFC Bank, all Indian ADRs ended in the red on Thursday. VSNL, MTNL and Punjab Tractors were the largest losers, each shedding almost 2%.

The stock market was closed on Friday, 01 January to observe New Year's Day. Looking ahead to next week, the economic calendar will be in focus, particularly the employment sector as the change in Nonfarm Payrolls and the Unemployment Rate for December will be released on Friday.