Stocks closed lower in the final trading day of a heavily volatile year. The Dow finished higher for the year, while the S&P erased its gains to close out largely flat.A look at the best and worst performers in the Dow Jones industrial average, which tracks 30 key U.S. companies; the biggest industry gainers and decliners in the broader S&P 500 index, which ended nearly flat for the year and some companies that rattled investors in 2011.
The European debt crisis and resulting economic impact are the biggest unknowns/risks for 2012. Despite the anticipated weakness in Europe, the U.S. economy is expected to grow at a sluggish pace around 2% over the next several quarters. While this isn’t an exciting outlook, and is not likely to lead to a big improvement in the employment picture, the relative value argument for equities remains quite strong. As mentioned above, with the S&P 500 trading at 12x forward earnings, the market valuation has gotten more attractive from where we stood at the end of 2010 (14x). The earnings yield of 8.2% is very attractive when compared to a 1.9% yield on 10-year treasuries. Additionally, U.S. corporate balance sheets are strong with record levels of cash. While these factors argue for an investment in equities, the attractive valuations are a reflection of the increased risk premiums being demanded in the face of so much uncertainty.
While the European situation is the biggest potential risk for 2012, it is a known variable the market has been dealing with for quite some time now. The current situation is factored in to market values. Other variables that are likely to play a part in market valuations and volatility include the trajectory of China’s economy, the political dynamics ahead of the 2012 U.S. presidential election, and geopolitical issues that crop up around the world (North Korea, Iran seem like potential areas of concern).
Best-Performing AMEX Stocks in 2011
Best-Performing NASDAQ Stocks in 2011While the European situation is the biggest potential risk for 2012, it is a known variable the market has been dealing with for quite some time now. The current situation is factored in to market values. Other variables that are likely to play a part in market valuations and volatility include the trajectory of China’s economy, the political dynamics ahead of the 2012 U.S. presidential election, and geopolitical issues that crop up around the world (North Korea, Iran seem like potential areas of concern).
Best-Performing AMEX Stocks in 2011
Worst-Performing NASDAQ Stocks in 2011
Best-Performing S&P Stocks in 2011
Worst-Performing S&P Stocks in 2011
Best-Performing DJIA Stocks in 2011
U.S. Equities
Dec 2011 Jan 2011 2011% 2010 %
close open Change Change
Dow Jones 12,166.21 11,577.51 5.1% 10.8%
S&P 500 1,251.69 1,257.64 -0.5% 12.6%
Nasdaq Composite 2,596.33 2,652.87 -2.1% 16.9%
Russell 2000 Index 738.71 783.65 -5.7% 26.1%
CBOE Volatility Index (VIX) 23.47 17.75 32.2% -19.2%
Europe Equities
Dec 2011 Jan 2011 2011% 2010 %
close open Change Change
FTSE 100 (UK) 5,512.70 5,899.90 -6.6% -31.3%
CAC 40 (France) 3,071.10 3,804.78 -19.3% -42.7%
Dax (Germany) 5,771.30 5,889.76 -2.0% 16.1%
Ibex 35 (Spain) 8,358.40 9,859.10 -15.2% -17.8%
FTSE MIB Index (Italy) 14,796.50 20,173.29 -26.7% -12.8%
ASE 20 Index (Greece) 258.30 663.10 -61.0% 40.9%
Asia and South Pacific Equities
Dec 2011 Jan 2011 2011% 2010 %
close open Change Change
Nikkei 225 (Japan) 8,423.60 10,228.92 -17.6% -3.0%
Hang Seng (Hong Kong) 18,518.70 23,035.45 -19.6% 5.3%
Shanghai Composite (China) 2,273.30 2,808.08 -19.0% -14.3%
Sensex (India) 15,727.90 20,509.09 -23.3% 17.4%
Kospi (South Korea) 1,825.00 2,051.00 -11.0% 21.9%
ASX 200 (Australia) 4,088.80 4,746.20 -13.9% -1.8%
Currency
Dec 2011 Jan 2011 2011% 2010 %
close open Change Change
Dollar Index 80.52 79.52 1.3% 1.4%
Euro 1.2937 1.34 3.0% 7.4%
Pound 1.5478 1.56 1.0% -1.4%
Yen 77.98 81.10 -3.8% 12.9%
Yuan 6.3172 6.59 -4.2% -3.3%
Swiss Franc 0.9425 0.94 0.8% -10.8%
Commodity
Dec 2011 Jan 2011 2011% 2010 %
close open Change Change
CRB index 306.33 332.80 -8.0% 15.8%
Crude Oil 99.68 91.38 9.1% 12.2%
Natural Gas 3.11 4.22 -26.3% -21.1%
Gold 1566 1421.10 10.2% 28.8%
Silver 27.47 31.22 -12.0% 81.2%
Corn 6.44 6.29 2.4% 32.1%
Soybeans 12.15 14.03 -13.4% 23.4%
S&P 500 Sectors
Dec 2011 Jan 2011 2011% 2010 %
close open Change Change
Financial 173.72 214.77 -19.1% 11.9%
Healthcare 399.38 364.78 9.5% 2.9%
Energy 516.28 506.75 1.9% 20.3%
Consumer Staples 335.39 303.58 10.5% 14.1%
Consumer Discretionary 307.23 295.64 3.9% 27.7%
Industrial s 290.18 301.12 -3.6% 26.4%
Utilities 182.4 159.34 14.5% 5.5%
Materials 209.46 239.61 -12.6% 22.2%
Information Technology 408.56 404.55 1.0% 10.0%
Airlines 80.02 123.65 -35.3% 41.9%
In the end, the United States outperformed global markets. Among major U.S. markets, the blue-chip Dow Jones Industrial Average (+5%) fared the best during 2011, while the small-cap Russell 2000 (-6%) fared the worst. European markets performed much worse. Greece (-61%) was the biggest loser in Europe as concerns mounted over the country's ability to repay its debts all year. Italy (-27%) and Spain (-15%) didn't fare much better, as the solvency concerns spread. Emerging markets also had a poor performance. India (-23%) was the biggest loser, followed by Hong Kong (-20%) and China (-19%). Even South America wasn't spared, as Brazil lost 18% on the year. Finally, Japan (-18%) struggled all year as the country tried to recover from the devastating March earthquake.
On the FX side, the dollar gained 1.4% against a basket of currencies, while the Euro fell 1% against the dollar. The Swiss Franc had a wild year but ended up nearly flat against the dollar. Finally, the Yen and Yuan (both +4%) continued to gain against the greenback.
On the commodities front, Gold was the top performer gaining 10%, which is the metal's 11th straight year of gains despite falling ~20% from its highs above $1900/ounce. Crude oil was close behind, gaining 9% this year. Some notable losers were silver (-12%) and Soybeans (-13%).
Among S&P Sectors, defensive sectors such as Utilities (+14%) and Consumer Staples (+10%) performed the best as investors sought safety in high dividend paying stocks. On the flip side Airlines (-35%) were the worst performer of 2011, followed by Financials (-19%).
On the FX side, the dollar gained 1.4% against a basket of currencies, while the Euro fell 1% against the dollar. The Swiss Franc had a wild year but ended up nearly flat against the dollar. Finally, the Yen and Yuan (both +4%) continued to gain against the greenback.
On the commodities front, Gold was the top performer gaining 10%, which is the metal's 11th straight year of gains despite falling ~20% from its highs above $1900/ounce. Crude oil was close behind, gaining 9% this year. Some notable losers were silver (-12%) and Soybeans (-13%).
Among S&P Sectors, defensive sectors such as Utilities (+14%) and Consumer Staples (+10%) performed the best as investors sought safety in high dividend paying stocks. On the flip side Airlines (-35%) were the worst performer of 2011, followed by Financials (-19%).
For the latest updates on the stock market, visit,
