By Barbara Kollmeyer, MarketWatch , Ryan Vlastelica
Stocks log solid yearly gains but end final trading day on down note
U.S. stocks fell in the final trading day of the year on Friday as investors took profits on some of 2016's highflying sectors, although major indexes posted strong annual gains and the Dow closed out its best year since 2013.
The day's losses were broad, with all but two of the 11 primary S&P 500 sectors ending lower. However, trading volume was light, as is typical for the final trading week of the year. Markets will be closed for the New Year's Day holiday (http://www.marketwatch.com/story/when-do-us-markets-close-for-new-years-day-2016-12-29) on Monday.
"Whatever moves we're seeing today are definitely exacerbated by low trading volume, as there are no major stories moving markets," said Steve Sosnick, equity-risk manager at Timber Hill/Interactive Brokers Group. "Some people may be rebalancing their portfolios ahead of year-end, and if you're trying to make major portfolio changes on a light-volume day, it will definitely cause the market to move."
See also:These are the best and worst performing assets of 2016 (http://www.marketwatch.com/story/these-are-the-bestand-worstperforming-assets-of-2016-2016-12-30)
Read: These ETFs could make your 2017 a happy new year (http://www.marketwatch.com/story/these-etfs-could-make-your-2017-a-happy-new-year-2016-12-30)
Wall Street stocks have been in a particular uptrend since last month's presidential election, which sparked a rally that has contributed the bulk of the year's gains. Investors are betting that President-elect Donald Trump will push for policies--including massive corporate tax cuts and deregulation--that will accelerate economic growth.
The Dow Jones Industrial Average dropped 57.18 points to 19,762.60, a decline of 0.3%. The S&P 500 fell 10.43 points, or 0.5%, to 2,238.83. The Nasdaq Composite Index fell 48.97 points to 5,383.12, a drop of 0.9%.
The Nasdaq was pressured by a drop in technology shares, which was the weakest sector on the day, down 1%, though it outperformed the broader market over the year.
Need to know:This is why stocks look set to fall as 2017 arrives (http://www.marketwatch.com/story/this-is-why-stocks-look-set-to-fall-as-2017-arrives-2016-12-30)
Friday marks not only the final trading day of the year, but also of the week, the month, and the quarter. The table below demonstrates how major indexes performed over those periods.
Index Week December Fourth quarter 2016
Dow -0.9% 3.3% 7.9% 13.4%
S&P 500 -1.1% 1.8% 3.3% 9.5%
Nasdaq -1.5% 1.1% 1.3% 7.5%
Russell 2000 -1.2% 2.5% 8.3% 19.4%
The strong annual gains largely reflect a second-half rally. Gains accelerated after Donald Trump's presidential election victory on Nov. 8. The Dow is up 7.8% since Nov. 8, its best Election Day-to-end-of-year performance since Dwight D. Eisenhower was elected president in 1952. Stocks had started 2016 on an inauspicious note, with the Dow posting the largest-ever five-day start to a new calendar year with a drop of more than 6%.
All four indexes hit a string of records in the year, while the Dow repeatedly came within 0.1% of the milestone level of 20,000, although it failed to penetrate it. With the week's decline, the Dow broke a seven-week streak of gains.
Read:Impressed by the Dow? This stock market has performed just as well in 2016 (http://www.marketwatch.com/story/impressed-by-the-dow-this-stock-market-has-performed-just-as-well-in-2016-2016-12-29)
"We seem to run into resistance around these levels, which isn't unusual given the gains we've seen recently," Sosnick said.
See:What Dow 20,000 means for stock-market investors (http://www.marketwatch.com/story/what-dow-20000-means-for-stock-market-investors-2016-12-14)
(http://www.marketwatch.com/story/what-dow-20000-means-for-stock-market-investors-2016-12-14)Also read:All of the important Dow milestones in one chart (http://www.marketwatch.com/story/all-of-the-important-dow-milestones-in-one-chart-2016-12-28)
On the economic data front, the December Chicago purchasing managers index fell 3 points to 54.6.
Shares of Innocoll Holdings PLC(INNL) plummeted 61% after the U.S. Food and Drug Administration said it was seeking further data on the company's treatment for postsurgical pain.
Read:The SEC's fraud-busting investing tips for 2017 (http://www.marketwatch.com/story/the-secs-fraud-busting-investing-tips-for-2017-2016-12-29)
Other markets: European stocks rose 0.4% on the day, though they posted their first yearly slide since 2011 (http://www.marketwatch.com/story/european-stock-set-for-first-yearly-slide-since-2011-2016-12-30), while Asian markets ended the year slightly higher.
The dollar index (http://www.marketwatch.com/story/dollar-weakens-against-yen-taking-a-hit-on-weak-us-home-sales-2016-12-29), which tracks the currency against a basket of six major rivals, fell 0.4%.
The Russian ruble fell sharply against the U.S. dollar as diplomatic tensions intensified (http://www.marketwatch.com/story/ruble-slides-after-diplomatic-spat-between-us-and-russia-2016-12-30) between the U.S. and Russia in the wake of sanctions against the latter over alleged U.S. election hacking. However, Russian President Vladimir Putin on Friday said Russia wouldn't expel U.S. diplomats (http://www.marketwatch.com/story/putin-says-russia-wont-expel-any-us-diplomats-2016-12-30) in retaliation for Washington's expulsion of 35 alleged Russian intelligence operatives.
Oil prices edged 0.1% lower but posted the first calendar-year gain since 2013 (http://www.marketwatch.com/story/oil-prices-higher-after-us-supply-data-shows-weak-rise-in-stockpiles-2016-12-30), while gold fell 0.5% (http://www.marketwatch.com/story/gold-gains-will-snap-worst-weekly-skid-in-12-years-2016-12-30).
(END) Dow Jones Newswires
December 30, 2016 16:34 ET (21:34 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.