S&P 500 ends at another record high as volatile 2020 ends

Wall Street closed out a tumultuous year for stocks with more record highs Thursday, a fitting coda to the market’s stunning comeback from its historic plunge in the early weeks of the coronavirus pandemic.

The benchmark S&P

500 index finished with a gain of 16.3% for the year, or a total return of about 18%, including dividends. The Nasdaq composite, powered by high-flying Big Tech stocks, soared 43.6%. The Dow Jones Industrial Average gained 7.2%, with Apple and Microsoft leading the way.

The market’s milestonesetting finish follows a mostly upward grind for stocks in recent weeks, fueled by cautious optimism that the U.S. economy and corporate profits will bounce back in 2021 now that the distribution of COVID-19 vaccines is under way.

“We came into the year expecting slow growth and it turned out to be the fastest bear market recovery in history,” said Sunitha Thomas, national portfolio advisor at Northern Trust Wealth Management.

The virus pandemic shocked markets early in the year. The S&P 500 fell 8.4% in February, then plunged 12.5% in March as the pandemic essentially froze the global economy. Businesses shut down in the face of the virus threat and tighter government restrictions. People shifted to working and shopping from home.

The dire economic situation weighed heavily on almost any company that relied on direct consumer spending or a physical presence, including airlines, restaurants, hotels and mall-based retailers.

Markets were mostly quiet on the final day of trading for the year. Several overseas markets were closed for holidays, and U.S. markets will be closed for New Year’s Day on Friday.

The S&P 500 rose 24.03 points (0.6%) to 3,756.07, an all-time high. The Dow rose 196.92 (0.7%) to 30,606.48, a record high. The Nasdaq rose 18.28 (0.1%) to 12,888.28.

The Russell 2000 index of smaller companies fell 5.14 points (0.3%) to 1,974.86. Smaller companies notched strong gains in recent weeks after lagging in the early months of the broader market rebound. The Russell 2000 ended the year with a gain of 18.4%.

Trading was closed in Tokyo and South Korea as well as Germany. France’s CAC 40 slipped 0.9% and Britain’s FTSE 100 lost 1.5%.

The yield on the 10-year Treasury note rose to 0.92% from 0.91% late Wednesday.