Center for Freelance Writing: 2011 Stock Index Trends

On Tuesday, the first day of market activity in the new year, US stocks climbed. Dow, NASDAQ, and S&P 500 all posted around or above 1.50% gain. This comes off 2011 that saw little change, particularly the S&P 500, which ended the year at 1257.60, just 4 ticks below the year's opening mark. Dow increased 5.5% for the year. All three indexes saw a tumultuous 2011. Roughly speaking, stocks rose for the first half of the year, with early July reaching or tying the apex for the year. End of July marked the beginning of downfall, followed by months of extreme volatility and eventual gradual increase to the starting level.

One can note the coincidence of major world events to several strong movements or trends in the indexes. Immediately after the March earthquake and tsunami in Japan, stocks fell with the fear of disruption in the global economy. The S&P 500 reached a nadir of 1279.20 on March 18th, over 60 points lower than the mark a month earlier. The tumble began at the end of July, as slow economic growth coincided with political gridlock in Washington over the debt deal. Unemployment for June was at 9.2%, while US economy grew only at an annual rate of 1.3% in Q2. After S&P downgraded the credit standing of US on August 5th, the indexes dropped over 6%. From August to November, the Dow swung an average of 269 points a day, reflecting the high volatility as the US watched the troubling developments of Europe and saw the unemployment numbers drop to 8.6% in November.

While the US stock market saw little to no growth in 2011 overall, the situation is much worse through rest of the world. Nearly all other countries saw indexes down, with a global (excluding US) average of -14%. But within, various sectors performed drastically different. Leading the sectors within S&P were utilities, consumer staples, and healthcare. McDonald's led the Dow with 31% gain, while financial groups saw biggest decrease.

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