US stocks: Wall Street ends best year since 1990s with moderate gains

Jan 01 2014, 13:54 IST
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SummaryBoth the Dow and the S&P 500 finished the final trading day of 2013 at record closing highs.

US stocks closed out their best year in more than 15 on Tuesday, with major indexes advancing throughout 2013 on the back of the Federal Reserve's massive stimulus and expectations for accelerating growth going forward.

Wall Street ended 2013 with its positive momentum intact, advancing in its final trading day of the year on the back of positive consumer confidence data.

The S&P 500 rose 29.6 percent over the year, its best annual performance since 1997, while the Dow climbed 26.5 percent in its best year since 1995. The Nasdaq jumped 38.3 percent, its best year since 2009.

Both the Dow and the S&P 500 finished the final trading day of 2013 at record closing highs.

In a sign of improving sentiment, the CBOE Volatility Index or VIX fell 23.9 percent over the year, the biggest annual drop for the so-called "fear index" since 2009.

All 10 S&P 500 sector indexes ended the year with gains as investors rode the Fed's extraordinary stimulus in a year that had only the slightest of hiccups. Wall Street even weathered a partial shutdown of the U.S. government, as well as the recent announcement that the Fed would trim its monthly bond purchases in response to an improving economic picture.

"This has been a terrific year, with all the concerns we had in January (2013) proving unfounded, and with current economic growth giving us a strong outlook for 2014," said John Carey, portfolio manager at Pioneer Investment Management in Boston.

Trading volume was once again light in U.S. markets, which will be closed Wednesday for the New Year's holiday. Still, investors found reasons to buy after a read on consumer confidence rose more than expected in December.

The S&P/Case-Shiller composite index of home prices in 20 metropolitan areas gained 0.2 percent in October from September, but posted the strongest annualized gain in October in more than seven years.

"There's been a generally positive trend to news, including the confidence report, which bodes well for conditions next year and gives us really no reason to sell," said Carey, who helps oversee $220 billion in assets.

About 63 percent of stocks traded on the New York Stock Exchange closed higher for the day, while 55 percent of the shares traded on the Nasdaq ended in positive territory.

The Dow Jones industrial average gained 72.37 points, or 0.44 percent, to end at 16,576.66. The Standard & Poor's 500 Index advanced 7.29 points, or 0.40 percent, to finish

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