Wall Street saw a merciful end to a dreadful year Wednesday as stocks closed the last session of 2008 with a sizable advance.
According to preliminary calculations, the Dow Jones industrials rose 108 points to 8,776 — but plunged nearly 34 percent over the course of the year as the U.S. mortgage and credit crisis turned into a global recession.
The past year marked the worst for the Dow since 1931.
Investors took some comfort Wednesday from the Labor Department’s report of a sharp drop in weekly unemployment claims. But many traders were out of the market, on vacation or having closed their books for the year.
Analysts said many investors were looking forward to the start of 2009. Still, there are many unknowns about the economy that could make Wall Street’s recovery from a terrible 2008 a difficult one.
“The tone is less onerous for stocks,” said Steven Goldman, chief market strategist, Weeden & Co. in Greenwich, Conn.
He said lighter volume and relief that the year is over likely aided the market’s advance.
Wall Street’s stats for 2008 are testimony to how stunningly terrible the year was:
UThe Dow lost 33.8 percent for the year and was down 38 percent from its record close of 14,165.53 in October 2007, making it the Dow’s worst year since 1931, when the country was deep into the Depression.
UThe Standard & Poor’s 500 index, the indicator most watched by market pros, lost 38.5 percent in 2008 and is down 44.8 percent from its 2007 high of 1,565.15 The S&P 500’s 52 percent decline at its November low was the worst since an earlier version of the index lost 54.5 percent from March 1937 to March 1938.
On Wednesday, the Dow rose 108.00, or 1.25 percent, to 8,776.39. The S&P 500 rose 12.61, or 1.42 percent, to 903.25.
The Nasdaq composite index fell 40.5 percent during 2008 and ended the year off 44.8 percent from its most recent high in October 2007.
The tech-heavy index peaked at 5,048.62 during the dot-com bubble at the start of the decade.
The Nasdaq rose 26.33, or 1.70 percent, Wednesday to 1,577.03.
The Russell 2000 index of smaller companies rose 19.74, or 4.09 percent, to 502.51.
Advancing issues outnumbered decliners by about 5 to 1 on the New York Stock Exchange, where volume came to a light 1.31 billion shares.
Tim Speiss, head of the wealth management division at Eisner LLP, said investors shouldn’t draw too much from the light holiday trading but said the drop in jobless claims and the financing for GMAC were encouraging.
“It’s really tough to draw any kind of conclusions because of the low volumes,” he said, adding “new jobless claims are down, that’s good.”
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