Wall Street ends tumultuous year near record highs

NEW YORK, (Reuters) - Wall Street closed near record highs in light trading yesterday, the last trading day of 2021, marking the second year of recovery from a global pandemic.

All three major U.S. stock indexes scored monthly, quarterly and annual gains, notching their biggest threeyear advance since 1999.

The S&P 500 gained 27% since the last trading day of 2020. Through Thursday, the benchmark index has registered 70 record-high closes, or the second-most ever. Using Refinitiv data back to 1928, the most record-high closes for the S&P 500 in a single year was 77 in 1995.

The Dow added 18.73% for the year, and the Nasdaq gained 21.4%.

Companies, consumers and the broader economy largely thrived in 2021 as they felt their way forward amid a constantly shifting landscape including a tumultuous transfer of power marked by the Jan. 6 Capitol riot. Other factors included the "meme stock" phenomenon, new COVID-19 variants, a labor shortage, generous fiscal/monetary stimulus, hobbled supply chains, booming demand and the resulting price spikes.

"What stands out to us this year among all the negatives, is the resiliency of Corporate America," said Ryan Detrick, chief market strategist at LPL Financial in Charlotte, North Carolina. "In a sea of uncertainty and higher prices, you have to be extremely impressed by how agile and adaptive Corporate America was to sport 45% earnings growth in a very difficult year."

Indeed, earnings results from S&P 500 companies blew past analyst estimates to deliver year-on-year growth in the first three quarters of the year of 52.8%, 96.3% and 42.6%, respectively, according to Refinitiv, which currently sees fourth-quarter annual earnings growth of 22.3%.

Energy, real estate and microchips, sectors associated with economic recovery and booming demand, were among 2021's top performers, with growth stocks' 31% advance handily outperforming the 22% gain in value stocks.

Market-leading tech and techadjacent megacap stocks, which outperformed the broader market in the first year of the global health crisis, were laggards as the economy slowly reopened and vaccines were deployed.