Stocks soar to highs to close out tumultuous 2020

Wall Street closed out a tumultuous year for stocks with more record highs Thursday, a fitting coda to the market’s comeback from a 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 technology stocks, soared 43.6%. The Dow Jones Industrial Average gained 7.2%, with Apple and Microsoft leading the way.

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 today.

The S&P 500 rose 24.03 points, or 0.64%, to 3,756.07, an all-time high. The Dow rose 196.92 points, or 0.65%, to 30,606.48, a record high. The Nasdaq rose 18.28 points, or 0.14%, to 12,888.28.

The Russell 2000 index of smaller companies fell 5.14 points, or 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%.

The market’s milestone-setting 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 underway.

“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 adviser 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, shopping and doing pretty much everything else 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.

Trading became volatile, especially in the early weeks of the pandemic, as investors scrambled during an increasingly grim economic outlook. The Dow had several dayto-day swings of about 2,000 points. And the S&P 500 rose or fell by at least 1% on twice as many days in 2020 than it did, on average, since 1950.

Wall Street didn’t stay down for long, thanks in large part to unprecedented actions from the Federal Reserve and Congress to support the economy. Investors flocked to big technology companies such as Apple and Amazon and smaller companies like Grubhub and Etsy that were poised to take advantage of the shift to working and shopping from home.

The S&P 500 jumped 12.7% in April. From there, markets disconnected from the rest of the still-reeling economy and pushed higher in fits and starts as vaccine development progressed and analysts and economists looked ahead to the eventual end of the pandemic.

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.

(AP) The Fearless Girl statue stands in front of the New York Stock Exchange in New York in this July photo. The S&P 500 and the Dow Jones Industrial Average ended 2020 at record highs Thursday on Wall Street, ending a year that saw a breathtaking nose dive in markets in the spring as the coronavirus took hold, followed by steady gains in the months that followed.