Investors mostly stayed away from the Street on Friday, being New Year's Eve and markets closed largely mixed. This was also one of the lightest volume trade days of the year. Though, apart from the Dow, certain benchmarks shed a few points on the closing day, the markets posted an optimistic picture at the year end. This was the second consecutive year that markets moved up. In addition, the benchmarks also posted double-digit growth for the year.
On Friday, the Dow Jones Industrial Average (DJIA) was up 0.07% and closed at 11,577.51. The S&P 500 was down 0.02% and closed at 1,257.64 and the Nasdaq ended the day at 2,652.87, down 0.38%. The CBOE Volatility Index (VIX) rose to 18. On the New York Stock Exchange, volumes were expectedly dry and for every four stocks that rose, three stocks ended in the red. For the year, DJIA was up 11%, while S&P 500 and the Nasdaq surged 13% and 17% respectively.
December has been an eventful month and it played an instrumental role for markets to move up in 2010. The month of December also helped certain indices post new highs, primarily driven by releases of positive economic data and earnings growth, among other factors. A strong rally in December was also an outcome of the extension of Bush-era tax cuts. The Dow, S&P 500 and the Nasdaq posted their best December performance since the years 2003, 1991 and 1999, respectively.
Concern about the euro-zone debt crisis had negatively affected the markets for several weeks in late 2010. The financial sector also felt the pinch before markets overcame concerns as the European Union declared a bail-out package. In other news, the Federal Reserve also declared its $600 billion worth stimulus plan in a bid to help the economy, and this helped the financial sector positively to an extent. The financial sector posted substantial one-month gains in December as key stocks surged ahead.
Gains by the financial sector were marked by banks leading a strong rally. Prominent stocks in the banking sector, such as Marshall & Ilsley MI surged 45%, Regions Financial RF soared 30%, Zion Bancorp ZION jumped 25%, Bank of America BAC rose 22%, while Wells Fargo WFC, JP Morgan JPM and Citi C were up 14%, 13% and 13% respectively.
Coming to mergers and acquisitions news, Universal American Corp UAM soared 40% after it agreed to be acquired by CVS Caremark Corp CVS, a drugstore chain, for approximately $1.25 billion. Shares of CVS slid 0.7%. Shares of IMAX Corp IMAX jumped 4.5% to close at $28.07 after a report that Sony Corp SNE might bid at least $40 per share for the big-screen movie company. However, Sony denied the report. Fremont Michigan InsuraCorp Inc. rose 9.6% to close at $28.50 after Biglari Holdings Inc. raised its bid to $31 a share to purchase the property insurer.
On to individual counters, shares of Borders Group plunged 22% after the country's' second-largest bookseller said it was delaying its payments to some publishers and warned it was facing a severe cash crunch in early 2011. Netflix Inc. NFLX and F5 Networks Inc FFIV, which had both jumped 226% and 150% in 2010 respectively, dropped 2.3% and 1.7% in Fridays trade.
BANK OF AMER CP (BAC): Free Stock Analysis Report
CITIGROUP INC (C): Free Stock Analysis Report
CVS CAREMARK CP (CVS): Free Stock Analysis Report
F5 NETWORKS INC (FFIV): Free Stock Analysis Report
IMAX CORP (IMAX): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis Report
MARSHALL&ILSLEY (MI): Free Stock Analysis Report
NETFLIX INC (NFLX): Free Stock Analysis Report
REGIONS FINL CP (RF): Free Stock Analysis Report
UNIVL AMERICAN (UAM): Free Stock Analysis Report
WELLS FARGO-NEW (WFC): Free Stock Analysis Report
ZIONS BANCORP (ZION): Free Stock Analysis Report
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