U.S. stocks mount milestone-shattering run in 2017
Taken a look at your stock portfolio lately? It’s a good bet it’s racked up solid gains for the year.
Wall Street has taken stock investors on a mostly smooth, record-shattering ride in 2017. The major stock indexes made double-digit gains for the year, led by Apple, Facebook and other technology stocks.
The Standard & Poor’s 500 index, the broadest measure of the stock market, had its best year since 2013.
“This would go in the category of stellar year, with very little volatility in the market and pullbacks that were essentially minor,” said Quincy Krosby, chief market strategist at Prudential Financial.
Several factors kept the market on an upward grind for most of the year and repeatedly drove stock indexes to all-time highs. The global economy rebounded, while the U.S. economy and job market continued to strengthen, which helped drive strong corporate earnings growth.
Investors also drew encouragement from the Trump administration’s and Republican-led Congress’ push to slash corporate taxes, roll back regulations and enact other pro-business policies. Congress passed the $1.5 trillion tax overhaul bill, which reduces corporate taxes from 35 per cent to 21 per cent, last week.
The S&P 500 index finished the year with a gain of 19.4 per cent, more than double its increase in 2016. The index has notched 62 record highs so far this year.
Including dividends, the S&P 500’s total return was 21.8 per cent, as of late Friday.
That means if you invested $1,000 in an S&P 500 index fund at the beginning of the year you’d wind up with about $1,218 at the end of the year.
Other major market indexes also were on course to deliver solid gains. The Dow Jones industrial average gained 25.1 per cent. The 30-company average set 71 all-time highs as it sped from just under 20,000 points to past the 24,000 mark.
The Nasdaq composite did even better and climbed 28.2 per cent. The tech-heavy index blew past the 6,000-point mark for the first time in April.
Small-company stocks, which trounced the rest of the market in 2016, got a boost this year as investors bet that the companies would be big beneficiaries of a corporate tax cut bill. The Russell 2000 index of smaller-company stocks gained 13.1 per cent.
The market’s gains have been broad, with seven of the 11 sectors in the S&P 500 closing in on double-digit gains, led by technology, which soared 36.9 per cent.
Only energy stocks and phone companies took losses for the year.
For the most part, markets overseas also fared better this year than in 2016.
In Europe, Britain’s market closed the year with a gain of 7.6 per cent. Indexes in Germany and France finished 2017 with gains of 12.5 per cent and 9.3 per cent, respectively. Japan’s Nikkei and Hong Kong’s benchmark index notched gains of 19.1 per cent and 36 per cent, respectively.
The gains in overseas markets reflect how economies in Japan, Europe, China and many developing nations began growing in tandem with the U.S. for the first time in a decade.
The U.S. lagged the rest of those economies early in the year, but caught up by summer and delivered GDP growth of 3.1 per cent in the second quarter and a 3.3 per cent gain in the third, its fastest rate in three years.