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What a difference a year makes.
A year ago, the Dow Jones industrials fell 221 points on the first day of trading, and the market went downhill from there.
On Friday, the first trading day of 2009, the Dow jumped 258 points, or 2.9%, to 9,035. That was the second-biggest point gain ever for the first day of the year, exceeded only by a 266-point jump in 2003. The percentage gain was its sixth-best ever for a first day of trading.
The Standard & Poor's 500 Index was up 29 points, or 3.2%, to 932. Howard Silverblatt, senior index analyst at Standard & Poor's, said the gain was the fourth-best percentage gain ever and best since 2003.
The Nasdaq Composite Index was up 55 points, 3.5%, to 1,632. The point gain was the best on an opening day since 2000, when it gained 61 points; the percentage gain was the best since a 3.7% gain in 2003, the NASDAQ Market Intelligence Desk reported.
The index was powered by big gains among such key stocks as Apple (AAPL, news, msgs), up 6.3% to $90.75, Microsoft (MSFT, news, msgs), up 4.6% to $20.33, and Qualcomm (QCOM, news, msgs), up 3.4% to $37.05, and Google (GOOG, news, msgs), up 4.4% to $321.32. (Microsoft is the publisher of MSN Money.)
The cheery close was the Dow's first close above 9,000 since Nov. 5. It was the S&P 500's best close since Nov. 5, and the Nasdaq saw its first close above 1,600 since Nov. 10.
The rally seemed powered by relief that 2008, the worst year for U.S. stocks since the 1930s, was over. It also reflected optimism that a combination of enormous federal aid to the banking system and a big economic stimulus plan expected from the incoming Obama administration will boost the economy.
At the same time, stock performance in the first five days of a new year, and January overall, has been a good predictor of how the full year will go. Since 1950, an up January has led to annual gains more than 90% of the time, the Stock Trader's Almanac says. Every down January has either presaged a flat market or worse.
But next week will come with risks, especially at the end of the week when the Labor Department reports on nonfarm payrolls and unemployment.
Monday will be tricky as well. Automakers will report their December sales. CNBC's Phil LeBeau said there's talk that December's results will be so bad that the annual sales rate will drop below 10 million units.
Last year was a nightmare for nearly all investors. The Dow's 33.8% loss for the year was its worst since 1931 and its third-biggest loss ever. The S&P 500 slumped 38.6% in 2008, its worst performance since 1937, and the Nasdaq lost 40.5%, its worst yearly loss since the index was created in 1971.
But after falling roughly 50% between their peaks in October 2007 and Nov. 20, stocks have been moving higher.
2008 finished with four gains in the last five sessions of the year. And, with Friday's rally, the Dow has gained 615 points or 7.3% since Dec. 23. The Dow is up 19.6% since Nov. 20, with the S&P 500 up 23.8% and the Nasdaq up 24%.
- Read more: Wall Street says 'Good riddance!' to 2008
A broad rally on light volume
Friday's rally was very broad with all 30 Dow stocks showing gains, led by General Motors (GM, news, msgs), up 14.1% to $3.65. The weakest performer was JPMorgan Chase (JPM, news, msgs), up 0.6% to $31.35.A total of 469 S&P 500 stocks were higher, along with 97 stocks in the Nasdaq-100 Index ($NDX.X), which was up 52 points, or 4.3%, to 1,264.
But volume was light: Barely 1 billion shares changed hands on the floor of the New York Exchange, with 1.49 billion shares traded on Nasdaq. Briefing.com noted that NYSE volume has exceeded only 1 billion shares only twice in the last seven sessions, not exactly a signal of investor confidence.
Energy stocks were among the day's biggest winners as crude oil moved up 3.9% to $46.34. Energy prices were rallying on Middle East tensions and Russia's move to cut natural gas supplies to Ukraine.
Crude is now up 34% since hitting a bottom of $33.87 on Dec. 19.
Apache (APA, news, msgs) jumped 6.4% to $79.26. Transocean (RIG, news, msgs) added 10.1% to $52.01.
Meanwhile, consumer discretionary stocks were strong, thanks to gains in such stocks as GM, Liz Claiborne (LIZ, news, msgs) and Office Depot (ODP, news, msgs).
Starwood Hotels & Resorts (HOT, news, msgs) was up 16.2% to $20.80, after speculation that real estate investor Sam Zell's Equity Group Investments was going to buy a larger stake in the company. Equity Group already owns 8% of the company.
Semiconductor and disk-drive stocks had big gains. Seagate Technology (STX, news, msgs) was up 14.7% to $5.08. Flash-memory maker SanDisk (SNDK, news, msgs) jumped 15.4% to $11.08. Dow component Intel (INTC, news, msgs) jumped 3.7% to $15.20; rival Advanced Micro Devices (AMD, news, msgs) was up 10.2% to $2.38.
| Close for week | Wk. ago close | % chg. | 2009 YTD. chg. | |
|---|---|---|---|---|
Dow Jones industrials | 9,034.69 | 8,515.55 | 6.10% | 2.94% |
S&P 500 | 931.80 | 872.80 | 6.76% | 3.16% |
Nasdaq Composite | 1,632.21 | 1,530.24 | 6.66% | 3.50% |
Russell 2000 | 505.84 | 476.77 | 6.10% | 1.28% |
Crude oil per barrel | $46.34 | $37.71 | 22.89% | 3.90% |
10-yr. Treasury yield | 2.42% | 2.14% | 0.28% | 7.66% |
Gold per troy ounce | $879.50 | $871.20 | 0.95% | -0.54% |
Worst manufacturing report in 28 years
The year's first economic data highlighted the crash that ended up defining 2008, but the news was not unexpected.The Institute of Supply Management manufacturing index fell to a reading of 32.5 in December, the lowest level since June 1980, when it came in at 30.3.
The ISM index came in at 36.3 in November. Economists had expected the index to show a 35.4 reading last month.
- Top Stocks blog: Exceptional stocks in 2008
Readings below 50 indicate contraction in the sector.
Russia halts gas supplies to Ukraine
Russia continued to withhold natural gas supplies to Ukraine this morning after contract talks broke down on New Year's Eve.The two countries are taking steps, however, to quell concerns that a natural gas contract dispute will prevent supplies from reaching Europe. So far, no disruptions have been noted, but worries persist because the pipeline that supplies Ukraine also carries 80% of the natural gas the European Union receives from Russia. In January 2006, Russia cut off supplies to the Ukraine for a day, resulting in supply disruptions in Europe.
On Thursday, Russia's Gazprom (GZPFY, news, msgs) cut off natural gas supplies to Ukraine after the two countries could not reach an agreement on fees and the cost of gas for the new year's contract. The deadline expired on midnight on New Year's Eve.
"I believe we are close to accepting a compromise solution," Ukrainian President Viktor Yushchenko said in a statement Thursday. Yushchenko said talks will likely resume in a few days, with a conclusive result by Orthodox Christmas on Jan. 7.
| Fri. | Wed. | Chg. | Month chg. | 2009 YTD chg. | |
|---|---|---|---|---|---|
Crude oil (NYMEX) (per barrel) | $46.34 | $44.60 | $1.74 | 3.90% | 3.90% |
Heating oil (per gallon) | $1.4803 | $1.4057 | $0.0746 | 5.31% | 5.31% |
Natural gas (per million BTU) | $5.9710 | $5.6220 | $0.3490 | 6.21% | 6.21% |
Unleaded gasoline (per gallon) | $1.1105 | $1.0620 | $0.0485 | 10.15% | 10.15% |
Time Warner Cable, Viacom settle dispute
Time Warner Cable (TWC, news, msgs) subscribers felt relief on New Year's Day after the cable provider and Viacom (VIA, news, msgs) settled a dispute that would have blacked out 19 Viacom channels on Time Warner's network.In the eleventh hour, the two companies agreed on fees, but terms of the deal were not disclosed.
The dispute would have affected 13.3 million Time Warner Cable customers in New York, North Carolina, South Carolina, Texas, Ohio and California, as well as 2.4 million Bright House Networks subscribers in Michigan, Indiana, California, Alabama and Florida.
Time Warner Cable was up 3.6% to $22.22. Viacom added 5.1% to $21.15.
More from MSN Money
Chip sales slump
Global semiconductor sales fell 9.8% to $20.8 billion in November from $23.1 billion a year ago, according to the Semiconductor Industry Association.- Top Stocks blog: Mutual fund fees are going up, up, up
"The worldwide economic crisis is having an impact on demand for semiconductors, but to a lesser degree than some other major industry sectors," SIA President George Scalise said in a statement. "We expect the industry will remain the second largest exporter in the U.S. for 2008."
Excluding memory products, worldwide chip sales fell 4.8% in November.
| Fri. | Wed. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
Treasurys | |||||
13-week Treasury bill | 0.085% | 0.115% | -0.030 | -26.09% | -26.09% |
5-year Treasury note yield | 1.727% | 1.551% | 0.176 | 11.35% | 11.35% |
10-year Treasury note yield | 2.416% | 2.244% | 0.172 | 7.66% | 7.66% |
30-year Treasury bond yield | 2.815% | 2.691% | 0.124 | 4.61% | 4.61% |
Currencies | |||||
U.S. Dollar Index | 82.805 | 82.150 | 0.655 | 0.80% | 0.80% |
British pound in dollars | $1.4548 | $1.4609 | -0.0062 | -1.27% | -1.27% |
Dollar in British pounds | £0.6874 | £0.6845 | 0.0029 | 1.28% | 1.28% |
Euro in dollars | $1.3910 | $1.3968 | -0.0058 | -0.71% | -0.71% |
Dollar in euros | € 0.7189 | € 0.7159 | 0.0030 | 0.71% | 0.71% |
Dollar in yen | 91.36 | 90.71 | 0.65 | 0.78% | 0.78% |
Canadian dollar in U.S. dollars | $0.828 | $0.821 | $0.0071 | 1.22% | 1.22% |
U.S. dollar in Canadian dollars | $1.209 | $1.218 | -$0.0095 | -1.20% | -1.20% |
Commodities | |||||
Gold | $879.50 | $884.30 | -$4.80 | -0.54% | -0.54% |
Copper | $1.4610 | $1.4100 | $0.05 | 3.62% | 3.62% |
Silver | $11.4900 | $11.2950 | $0.20 | 1.73% | 1.73% |
Corn | $4.1225 | $4.0700 | $0.05 | 1.29% | 1.29% |
Crude oil (NYMEX) (per barrel) | $46.34 | $44.60 | $1.74 | 3.90% | 3.90% |
How the indexes fared in '08
Market Dispatches tracks 42 domestic indexes throughout the year. Needless to say, none had a good year. There were, however, indexes that tracked better than others on a relative basis, including biotechnology, pharmaceuticals, gold and transportation.Perhaps the most ironic performance of the year was the 29% loss suffered by the Amex Airline Index ($XAL.X), the eighth-best performance of the 42 indexes. The index fell 53% in the first half of the year as crude oil soared above $147 a barrel.
In the second half of the year, the oil bubble burst and crude fell more than $100 after peaking in July, helping boost the index up 51% for the last six months of 2008.
The airline index's second-half gain was the best performance over that time period -- and the only positive performance as well.
Wal-Mart Stores (WMT, news, msgs) was the best performer of the year, up 18%. Citigroup (C, news, msgs), Alcoa (AA, news, msgs) and General Motors were the Dow's worst performers for the year. Alcoa was off 69%, with Citigroup and GM down 77% and 87%, respectively.
The trio, ironically, were Friday's best Dow performers. In addition to GM's 14.1% gain, Alcoa rose 7.6% to $12.11. Citigroup was up 6.4% to 47.14.
| Index | Close | 2008 chg. | Index | Close | 2008 chg. |
|---|---|---|---|---|---|
Winners | Losers | ||||
Amex Biotechnology Index | 647.17 | -17.72% | Philadelphia Semiconductor Index | 212.17 | -48.00% |
Amex Pharmaceutical Index | 272.84 | -19.40% | KBW Insurance Index | 82.23 | -48.07% |
Dow Jones Transportation Average | 3,537.15 | -22.61% | S&P Banking Index | 137.53 | -49.94% |
Amex Tobacco Index | 667.04 | -23.78% | KBW Bank Index | 44.32 | -49.98% |
S&P Health Care Index | 309.41 | -24.48% | Dow Jones U.S. Financials Index | 226.52 | -52.23% |
Amex Gold Bugs Index | 302.41 | -26.13% | Morgan Stanley Healthcare Payors Index | 960.18 | -54.81% |
Philadelphia Gold and Silver Sector index | 123.85 | -28.54% | Dow Jones U.S. Steel Index | 184.78 | -55.66% |
Amex Airline Index | 24.26 | -29.33% | Philadelphia Oil Service Sector Index | 121.39 | -59.75% |
Dow Jones Utilities Average | 370.76 | -30.38% | Amex Disk Drive Index | 53.31 | -60.90% |
S&P Retail Index | 279.26 | -31.88% | Amex Securities/Broker Dealer index | 77.47 | -62.65% |
Andrew Rosenbaum contributed to this report.
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