Market Wrap: S&P, Dow, Nasdaq All Up for the Year

Seth Wenig/AP By Ken Sweet

NEW YORK -- U.S. stocks ended a strong 2014 with moderate declines Wednesday. Even with the losses, the Standard & Poor's 500 index (^GPSC) finished the year with an 11.4 percent increase, its sixth straight year of gains. Oil, by contrast, had its worst annual performance since 2008, ending down 45 percent for 2014 after a sharp slump in the second half of the year.

The 11.4 percent rise in the S&P 500 w! as double what strategists expected for the market at the beginning of the year. "It turned out to be a great year for U.S. economic growth, which got us higher corporate profits as well," said Cameron Hinds, regional chief investment officer for Wells Fargo Private Bank.

U.S. markets will be closed Thursday for New Year's Day and will reopen Friday. Most strategists believe the stock market will also rise in 2015, but they expect more modest gains of between 4 percent and 6 percent.

There was no major catalyst for Wednesday's selling. Trading has been slow all week because of the holidays and most fund managers have closed their books for the year. However, some investors do reshuffle their portfolios in the last few days of the year for tax purposes. Roughly 2.6 billion shares were traded on the New York Stock Exchange, compared with the 3.6 billion typically traded on an average day.

A Hit in Energy

Energy stocks edged lower as th! e price of oil fell. Benchmark U.S. crude dropped 85 cents to ! $53.27 a barrel in New York. Oil has plunged since June amid abundant supplies and weak global demand. In total, the price fell 45 percent in 2014, the worst year for crude since the 2008 financial crisis.

Oil drillers fell the most Wednesday. Diamond Offshore (DO) was the biggest decliner in the S&P 500, declining 3.6 percent. The energy component of the S&P 500 is down 10 percent this year
"I think most of the selling you're seeing today is related to the fall in oil, as well as repositioning before the end of the year," Hinds said.

On Wednesday, the Dow Jones industrial average (^DJI) fell 160 points, or 0.9 percent, to 17,823.07. It ended 2014 up 7.5 percent, lagging behind the S&P 500 and Nasdaq (^IXIC). The Nasdaq lost 41.39 points, or 0.9 percent, to 4,736.05. The Nasdaq rose 13.4 percent in 2014. The S&P 500 fell 21.45 points, or 1 percent, to 2,058.90.

Prices for U.S. government bonds rose. The y! ield on the 10-year Treasury note edged down to 2.17 percent. Bonds were an unexpected strong spot for the market in 2014. The 10-year note started 2014 at around 2.99 percent. Bond yields fall as prices rise.

Gold fell $16.30 to $1,184.10 an ounce. The precious metal barely budged in 2014, falling 0.2 percent, compared with its drop of 28.3 percent in 2013. Silver fell 68 cents to $15.60 an ounce and copper fell three cents to $2.83 a pound.

What to Watch Friday:

• The ISM manufacturing composite index is released at 10 a.m.

• When it comes to items you use on a regular basis, sometimes it's worth shelling out a little more to buy a better-quality product that will last longer.

  If you spend a lot of time on your feet, investing in a pair of high-quality shoes is much smarter than grabbing a cheap pair that will wear out in a matter of weeks.

  If you live in an area that gets socked with snow in the winter, investing in a mid-range snowblower makes more sense than buying the clearance model with the one-star reviews.

  Think not just in terms of price, but also how much value you'll get for that price.

  1. The item will last longer
• Spending a little more each month to get better insurance coverage could save you hundreds, if not thousands, if you ever find yourself in a situation where you need to make a claim on that coverage.

  Opting for regular car maintenance and preventative health care can save you from costly bills down the line if you neglect to keep things in good working order.

  Fixing something right, rather than doing the bare minimum to keep it running (or, worse, paying a handyman with less-than-great credentials) is much smarter than doing shoddy work that will only result in a much worse (read: more expensive) repair bill later.

  2. It will save you money down the road
• Sometimes it's worth spending a little time to save a little money -- like cooking at home rather than paying twice as much to get a pre-made meal. But sometimes, working too hard to save a buck wastes more time than it's really worth.

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  When it comes to extremes like this, you need to ask yourself if your time investment is really worth the return you're getting. Spending hours of your life to save a few cents here or there is probably not worth it.

  3. It will save you (valuable) time
• There's no doubt a dollar-menu fast food burger is cheaper than making a healthy meal from scratch. But the money you're saving is probably not worth the risk you're taking when it comes to your health.

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• DIYing can save you tons of money-if you know how to do it yourself properly. If you don't, you could wind up doing more harm than good.

  If you don't know a hammer from a hacksaw, it's probably not a wise idea to try to fix that plumbing problem. If you're all thumbs, cutting your own hair is probably not the best way to save some money. Sometimes it's better to leave a job to the professionals; know where your own strengths and weaknesses lie and be mindful of them.

  5. You can't do it right yourself
• A life of deprivation never helped anyone stay motivated to reach a goal. Just like dieters need to allow themselves a small, healthy treat now and then to keep their spirits up, savers need to grant themselves some small splurges or else they risk becoming so miserable they commit a big splurge out of frustration.

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  6. It's a small splurge that gives you a big boost
• More from Paula Pant:

Source : http://www.dailyfinance.com/2014/12/31/market-wrap-indexes-up/