U.S. stocks were little changed on the last trading day of 2021, indicating a quiet finish in a year of repeated records on Wall Street on low interest rates and the rollout of Covid-19 vaccines.
The S&P 500 traded around the flatline Friday morning, bouncing between small gains and losses. The broad-market index is on course to finish the year about 27% higher, which would be its largest annual percentage gain since 2019. The tech-focused Nasdaq Composite also wobbled after the opening bell, while the Dow Jones Industrial Average edged down less than 0.1%.
The calm trading Friday juxtaposes a busy year in markets in which individual investors piled into meme stocks and the rollout of Covid-19 vaccines and low interest rates motivated investments in equities. These factors helped lead the S&P 500 to close at a record 70 times this year, more than a quarter of all trading days, according to Dow Jones Market Data.
Much of the broader market rally was also driven by a small group of massive stocks, such as Apple, Tesla and Microsoft. Microsoft and Tesla shares have each risen more than 50% this year, while Apple has gained more than 30%.
“This is really the year of the economic recovery,” said Sean Markowicz, an investment strategist at Schroders. “In 2022, I see growth cooling as the massive policy stimulus in response to the pandemic fades.”
Investors are watching a number of risks heading into 2022 that could derail the market’s rally. Cases of the Omicron variant of Covid-19 are surging, causing some businesses to curtail services and hours as workers call in sick. U.S. inflation reached a nearly four-decade high last month, raising questions about how many price increases Americans can absorb and if that will affect corporate earnings. The Federal Reserve has also set the stage for a series of interest-rate increases beginning next spring.
On Friday, shares of Ford Motor led the S&P 500, gaining 2.6%. The car maker’s stock, which has been a favorite among retail investors all year, soared nearly 140% this year, on track for its biggest annual gain since 2009.
Other market leaders included Pfizer, whose shares added 1.6%. The health-care giant’s stock rose following news that the U.K.’s drug regulator had authorized its Covid-19 oral antiviral pill, as well as signs that public health officials in the U.S. may approve booster shots against the virus for 12- to 15-year olds as early as next week.
In bond markets, the yield on the benchmark 10-year Treasury note ticked down to 1.510% from 1.514% Thursday. The yield rose 0.601 percentage point this year as of Thursday, the largest one-year yield gain since 2013, according to Dow Jones Market Data. Investors have sold out of government bonds, pushing up yields, because holding bonds that yield less than inflation means locking in a loss. Yields and prices move inversely.
Overseas, the pan-continental Stoxx Europe 600 edged almost 0.2% lower, with markets closed in Germany, Spain and Italy. The broad-market index has risen more than 20% this year.
Shares of Hunter Douglas, a Dutch window blinds and coverings maker, surged 70% in Amsterdam trading after private equity firm 3G Capital agreed to buy a majority stake in the company.
The fast-spreading Omicron variant is clouding the outlook for oil markets after a rapid recovery in demand pushed prices to their highest levels in years. Brent crude futures, the benchmark in global oil markets, declined 1% Friday to $78.77 a barrel.
Shares of Chinese internet and technology companies jumped in Hong Kong on the last day of the year, following a surge in their corresponding American depositary receipts overnight. The Hang Seng Tech Index, which tracks the 30 largest technology companies listed in the city, rose 3.6% on Friday in a holiday-shortened trading session. The broader Hang Seng Index gained 1.2%.
China’s Shanghai Composite added 0.6% Friday. Markets in South Korea and Japan were closed for a holiday.
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