Saturday, December 31, 2005
NEW YORK, Dec. 30 -- Investors marked the last trading day of 2005 Friday with the same problem they faced all year -- trying to find a good reason to buy stocks and coming up short. Stocks fell to their December lows, and the Dow Jones industrial average finished the year with a loss.
With little news to spur buying, stocks fell as investors consolidated their meager profits for the year. As a result, the Dow recorded its first down year since 2002. The other major indexes posted modest gains for 2005.
The year was marked by skyrocketing energy prices, a slowing economy, hot-and-cold inflation threats and the Federal Reserve steadily raising interest rates -- all of which made investors nervous about the state of the economy and kept stocks volatile but ultimately little changed since the end of 2004.
Investors hope the Fed will stop raising rates as early as possible in 2006 to avoid slowing the economy unnecessarily, and nervousness on this point has kept stocks in check through December.
The Dow fell 67.32, or 0.62 percent, to 10,717.50. The Dow needed to remain above 10,783.01 for a positive 2005.
Broader stock indicators also lost ground. The Standard & Poor's 500-stock index fell 6.13, or 0.49 percent, to 1,248.29, and the Nasdaq composite index fell 12.84, or 0.58 percent, to 2,205.32.
For the year, the Dow fell 0.61 percent, while the S&P rose 3 percent and the Nasdaq gained 1.37 percent.
Bonds moved lower in volatile trading, with the yield on the 10-year Treasury note rising to 4.39 percent from 4.36 percent late Thursday. The inversion of the yield curve this week, with two-year bonds now yielding more than the 10-year, pressured stocks, as many on Wall Street feel that such an inversion augurs a slower economy and a possible recession.
The dollar rose against most major currencies.
December was a difficult month for stocks and the anticipated "Santa Claus" rally never materialized as concerns once again arose over the Fed's policies and energy prices marched back above $60 a barrel. For the month, the Dow lost 0.82 percent, the S&P fell 0.1 percent and the Nasdaq fell 1.23 percent.Movers
Citigroup fell 5 cents to $48.53. A Chinese magazine said would buy a stake in China's Guangdong bank.
Google fell $5.29 to $414.86. Rates Technology claims in a lawsuit that Google inappropriately used its voice-over-Internet technology in its Google Talk product.
Intel fell 11 cents to $24.96. The chipmaker is introducing a new logo and will no longer use the Pentium brand name.Indexes
New York Stock Exchange composite index fell 34.19, to 7753.95.
American Stock Exchange index rose 1.54, to 1759.08.
Russell 2000 index of smaller-company stocks fell 4.74, to 673.22.Volume
NYSE: 1.5 billion shares, up from 1.44 billion on Thursday. Decliners outnumbered advancers 7 to 5.
Nasdaq: 1.32 billion shares, up from 1.21 billion. Decliners outnumbered advancers 4 to 3.Commodities
Crude oil for February delivery: $61.04, up 72 cents.
Gold for current delivery: $517.10 a troy ounce, up from $515.70 on Thursday.