US stocks end year in a steady note

Stocks have a cheerful FY 2010

US stocks ended with nominal changes on Friday, 31 December 2010, the last trading day of the year 2010. Stocks were flat for most of the final session of the year, but ran into a flurry of selling in the final minutes. Friday's small moves in U.S. stocks came as investors made their final position changes for 2010, moving to lock in profits from 2010 while setting up fresh bets for the New Year. Their performance for 2010 was strong, though. The dollar continued to stay weak but the same too failed to induce any buying.



For the day, that ended on Friday, 31 December 2010, Dow ended higher by 7.8 points (0.07%) at 11,577.51. Nasdaq ended lower by 10.11 points (0.4%) at 2,652.87. S&P 500 ended lower by 0.24 points (0.02%) at 1,257.64.

Four out of ten economic sectors ended higher led by telecom and financial sectors. Technology and healthcare sectors were the main laggards. Energy and utilities sectors ended as laggards. Dow components ended mixed with Alcoa leading the pack of winners.

For the year, the Dow, Nasdaq and S&P 500 gained 11%, 17% and 13% respectively. Caterpillar was the best performing Dow component gaining 64% followed by Du Pont, Mc Donalds and Home Depot. H-P, Cisco Systems and Bank of America were the worst performing Dow components for the year.

FY 2010 represented the second year of the financial markets' rebound, which took place amid continued economic recovery for the world. There weren't nearly as many critical events in 2010 as there were in 2009 or 2008, but there were still several noteworthy items that shaped the year. This played out through an early-spring rally, a pre-summer sell-off and then a fall rally to finish the year at two-year highs.

On Friday, the day was light in terms of data or news flow. Still, there was some deal making news. Volume was particularly light, with just under 2 billion shares having changed hands in New York Stock Exchange Composite trading. Friday marked the second-lowest volume day of the year, behind the day after Thanksgiving. For the week, the indices witnessed minor changes.

In terms of deal news, CVS Caremark Corp. shares slipped 0.7% after the drugstore chain agreed to acquire Universal American's Medicare Part D prescription drug business for $1.25 billion, a deal that will more than double the size of CVS's share in that program.

In addition, Imax shares rose after U.K. newspaper the Daily Mail said Sony Corp. is considering a $40-a-share bid for big-screen movie company, with Walt Disney Co. interested as well.

Crude prices ended higher on Friday, 31 December 2010 at Nymex. Prices were back above the $90 level, the same level oil had last witnessed more than two years back. Prices rose as the dollar stayed weak. Prices also rose as traders anticipate growing demand in the coming months. On Friday, crude oil futures for light sweet crude for January delivery closed higher by $1.54 (1.7%) at $91.38/barrel. For the week, crude closed marginally lower. Crude ended December higher by 8.6%. Crude ended the fourth quarter higher by 13%. For the year, crude closed higher by 15%.

Natural gas also traded higher Friday, with the February contract gaining 7 cents, or 1.5%, to $4.41 per million British thermal units. Natural gas, however, ended down 21% in 2010.

In the currency market on Friday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, slipped by 0.5%. The dollar index gained 1.5% for the year.

Precious metals ended sharply higher on Friday, 31 December 2010 at Comex, the last trading day of FY 2010. Prices rose as the dollar stayed weak. With Friday's gains, precious metals registered sharp gains for the month of December and for the full year.

On Friday, gold for February delivery rose by $15.5 (1.1%) ending at $1,421.4 an ounce on the New York Mercantile Exchange. During intra day trading, it touched a high of $1,431.5. It was an all time high close for the yellow metal. For the week, gold ended higher by 3%. For the year of 2010, gold ended higher by 30%, its tenth consecutive yearly gain.

On Friday, December Comex silver futures ended higher by 42 cents (1.4%) at $30.94. It was an all time record price for silver in more than three decades. Prices gained 3.3% for the week. For the year, silver ended higher by 83.7%.

Indian ADRs ended mixed on Friday. Wipro and Infosys lost 1% and 0.6% respectively. ICICI Bank gained 0.4%.

With low interest rates, improving economic data and healthy projected earnings growth, the outlook for 2011 remains relatively bullish.