Wall Street advanced on Thursday and the dollar gained ground as investors closed the book on a turbulent year of pandemic, recession and recovery. All three major indexes gained ground, with the Dow and S&P 500 picking up steam in the session’s final minutes to exit 2020 at record highs.
Over the course of a historic year, the indexes both roared and plummeted as economic shutdowns to contain the coronavirus brought markets to their knees.
”It’s a quiet day with little news and low volume – an ironic end to such a tumultuous year,” said David Carter, chief investment officer at Lenox Wealth Advisors in New York. ”All eyes are on next year, which will be ’show me’ time, with investors watching to see if actual fundamentals will be as strong as current stock prices are forecasting.”
Equities bounced back with a vengeance following the plunge in March, with the Nasdaq, S&P 500 and Dow posting respective annual gains of 43.6 percent, 16.3 percent and 7.2 percent.
”When you think about the year we’re glad it’s over, but it was also unbelievable in a lot of different ways,” said Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina. ”This is the first year in history that the S&P was down 30 percent for the year at one point and managed to end higher.
”It is a good reminder for investors to have a longer time horizon and when bear markets arise they likely should be viewed as opportunities and not a time to panic, which is easier said than done,” Detrick added.
Initial jobless claims unexpectedly dropped for the second straight week, according to the Labor Department, but remain elevated as the economy stumbles through a COVID-19 resurgence. President Donald Trump was expected to fly back to Washington on Thursday to pick up his fight with Congress over a defense bill and stimulus checks.
Nations around the world struggled to deploy vaccines to end the global health crisis. About 2.8 million Americans have been inoculated so far, falling well short of the year-end goal of 20 million.
The Dow Jones Industrial Average rose 196.92 points, or 0.65 percent, to 30,606.48, the S&P 500 gained 24.03 points, or 0.64 percent, to 3,756.07 and the Nasdaq Composite added 18.28 points, or 0.14 percent, to 12,888.28.
European stocks closed lower as tighter coronavirus restrictions in the UK and higher US tariffs on some EU products dampened optimism on the last day of the Brexit transition.
The pan-European STOXX 600 index lost 0.30 percent and MSCI’s gauge of stocks across the globe gained 0.15 percent, lost 0.45. Oil prices advanced on hopes of rebounding demand, but US and Brent crude prices ended 2020 down 20.5 percent, and 21.5 percent, respectively. US crude rose 0.25 percent to settle at USD 48.52 per barrel and Brent settled at USD 51.80 per barrel, up 0.33 percent on the day.
US Treasury yields dipped, pulling the yield curve flatter, as thin volume exaggerated market moves. Benchmark 10-year notes last rose 3/32 in price to yield 0.9165 percent, from 0.926 percent late on Wednesday. The 30-year bond last rose 12/32 in price to yield 1.6462 percent, from 1.662 percent late on Wednesday.
The dollar rose against a basket of world currencies but ended its worst year since 2017 as expectations for further fiscal aid and easy monetary policy from the US Federal Reserve prompted investors to shun the greenback.
The dollar index rose 0.24 percent, with the euro down 0.6 percent to USD 1.2221.
The Japanese yen weakened 0.06 percent versus the greenback at 103.26 per dollar, while sterling was last trading at USD 1.3673, up 0.37 percent on the day.
Gold prices gained as safe-haven metal notched its best year in a decade due to economic uncertainties caused by the pandemic. Spot gold added 0.2 percent to USD 1,897.88 an ounce.