Stock Market Today: Dow and S&P 500 Cap Blockbuster Year as Stock Dips

Still, the S&P 500 ended 2021 up 27%, completing its best three-year period since 1999. The Dow rose 19% over the year, while the Nasdaq gained 21%. The S&P 500 has risen 90% in the past three years.

Overseas, London

FTSE 100
closed the year with a daily decline of 0.3%, while in Hong Kong the

Hang Seng Index
closed 2021 with a gain on Friday of 1.2%.

The performance of the S&P 500 in 2021 lands in the top five years dating back to 1927, with the Dow in the top third as early as 1896.

The past year has seen investors take a ride on “meme-stock” frenzy, the best oil price bull run in more than a decade, and a staggering rise in the value of cryptocurrencies like Bitcoin, among other trends.

“2021 was a year of low volatility and high returns for the S&P 500. This is reminiscent of 2013 and 2017. Looking ahead to 2022 (like 2014 and 2018), we expect volatility to pick up,” Thomas Hayes, chairman of Great Hill Capital, told Barron’s.

The market’s strong performance in 2021 came in a year marked by supply chain challenges, labor shortages, surprisingly strong corporate earnings, a deluge of central bank stimulus – which began to wane – and creeping inflation.

“The defining feature of markets in 2021 for me has been the incredible resilience of corporate earnings,” said Tom Essaye, the founder of Sevens Report Research. Barron’s. “Specifically, how a huge inflation spike ended up being positive for corporate profits because it didn’t slow demand, while corporate margins mostly held up or, in some cases, increased.”

The resilience of companies is shared by many on Wall Street, including Heather Wald, vice president at Bel Air Investment Advisors, who emphasized that U.S. companies bought back a record $1 trillion worth of shares in 2021.

“The expected return to normalcy in 2021 fell short of expectations as highly transmissible Covid-19 variants continued to change our daily lives. However, US equity markets shrugged off major virus-related headwinds,” Wald . said Barron’s. “With negative real interest rates on bonds and a lack of other attractive investment alternatives, investors put excess cash into stocks instead.”

On New Year’s Eve, usually one of the quietest days of the year for markets, not much changed in the markets. Trading was subdued during the holiday season, including some of the lowest volume days of 2021, as seasonality took over. Stocks often do well over Christmas in what is called the Santa Claus rally; the S&P 500 has risen steadily since Dec. 20, gaining 4.5%.

Crude oil prices fell Friday. International benchmark Brent oil futures contracts fell 2.2% to $77.78 a barrel, while US West Texas Intermediate crude oil futures fell 2.3% to $75.21.

Despite Friday’s drop, oil prices are up more than 50% in 2021, supported by a global energy shortage and rising demand for crude oil as economies around the world bounce back from the depths of the Covid-19 pandemic. Analysts see that through to 2022.

“Commodity prices will remain firm as product shortages do not go away,” Jeffrey Halley, an analyst at brokerage Oanda, told me. Barron’s. “Challenges in the supply chain and global demand for recovery will hold prices back. Brent oil should be moving towards $90-$100 a barrel in this environment.”

For cryptocurrencies, which have fallen over the past week, the last day of the year turned out to be much of the same. Bitcoin, the leading digital asset, fell 2.9% to $45,892.

“This week has been another volatile period for crypto,” said Marcus Sotiriou, analyst at digital asset broker GlobalBlock. “Bitcoin is bouncing back now.”

Heading into 2022, Sotiriou expects more institutions to re-allocate to crypto in the first quarter of next year, saying data suggests this is already happening.

“Almost 10,000 Bitcoin left”

Coinbase

‘s exchange in the last 24 hours – this happens when long-term investors (usually institutions) buy a large amount of Bitcoin, while transferring the Bitcoin to another storage location,” the analyst noted.

Bitcoin
is up more than 60% since early 2021, but remains above $67,000 in November.

Here are three stocks in motion on Friday:

Chip group

Advanced micro-devices

(ticker: AMD) was up in the morning before offsetting gains for a 0.9% loss. The company announced late Thursday that it was acquiring

Xilinx

(XLNX) to close in the first quarter of 2022 rather than by the end of this year. The share of Xilinx fell 0.9%.

Platoon Interactive

(PTON) fell 3.9% after a cut from Market Outperform to Market Perform at investment bank JMP. Shares ended up 75% lower in 2021

Write to Jack Denton at [email protected]