December 31, 2008
The market scored impressive increases on the last day of this year. The NASDAQ up by 1.70 percent beat all December 31s in its history. The S&P500 did well, but at 1.42 percent, fell behind the more than two percent increase on the last day of 1974. The DJIA performance was identical. Note that the 1974 record is similar to this year: prices on December 31 declined from the last day of the previous year.
Todays results are in line with the historical record of these indices: they closed higher in this negative year, as they have so often done in the past. This is the identical conclusion reached yesterday, when the indices robust performance continued the price change patterns of past years.
Turning to Friday, the first trading day of the year, one can look ahead to increases occurring about as often as decreases. This has been the pattern since 1950 (1972 for the NASDAQ), regardless of whether the market was coming from a year of growth or of decline.
DJIA 1.25 percent
NASDAQ 1.70 percent
S&P500 1.42 percent