NEW YORK—U.S. stocks fell last Friday in a light trading session, ending the year on a whimper.
The blue-chip Dow Jones Industrial Average dropped 69 points, or 0.6 percent. The broader S&P 500 Index fell 5 points, or 0.4 percent, while the technology-heavy Nasdaq Composite Index slid 8.6 points, or 0.3 percent.
It was a volatile year for the stock market, which endured the economic impact of Japan’s massive earthquake and tsunami as well as news that the Eurozone may slide back into recession due to its member nations’ high debt loads.
For 2011, the Dow is up 5.5 percent. The S&P 500 was on pace to finish the year with a gain, however with last Friday’s losses it ended 2011 slightly below break-even. The Nasdaq Composite fell 1.8 percent, the index’s first losing year since 2008.
As expected, the year was not kind to financial services companies, which bore the brunt of the Eurozone crisis. The S&P 500 Financial index ended 2011 lower by 18 percent, the worst performing industry tracked by S&P.
But investors looking toward 2012 for better returns may not find greener pastures.
“Volatility is likely to persist through early 2012 because of the uncertainty in Europe and rising concern about slowed earnings growth due to recent revisions,” wrote Reuters columnist Edward Krudy. “U.S. companies cutting earnings’ outlooks recently outpaced those raising theirs by the greatest ratio in 10 years.”
Bank of America Corp. was the Dow’s biggest loser in 2011, ending the year down more than 58 percent. Other banks did not decline as much, but banking shares may not perform much better in 2012 due to the ongoing European sovereign debt crisis, which remains to be resolved.
“It’s tempting to write off 2011 as one long, crazy dream about European debt and Congressional stonewalling,” said Schaeffer’s Investment Research VP Todd Salamone in a note. “The harsh reality is that stocks are still staring up at formidable resistance levels.”
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