Wall Street might have exited 2021 with a whimper, but most investors will look back kindly on a sterling year for stocks.
Friday’s action was typical for New Year’s Eve: Little news or data meant a low-volume, low-movement session in which just one sector (communication services, off 1.4%) finished with a move of more than 1% in either direction.
Pfizer (PFE, +1.1%) rose after the U.K. approved its Paxlovid COVID-19 antiviral treatment for those older than 18. PFE also got a boost from data published by the Centers for Disease Control and Prevention showing its coronavirus vaccine generated mostly mild side effects in children ages 5 to 11.
But broadly speaking, stocks merely went through the motions Friday, with a late-day swoon ensuring modest declines for the major indexes. The Dow Jones Industrial Average (-0.2% to 36,338), S&P 500 (-0.3% to 4,766) and Nasdaq Composite (-0.6% to 15,644) all closed in the red. So too did the small-cap Russell 2000, which was off 0.1% to 2,245.
Here’s some better news: All of the major indexes enjoyed robust gains in 2021. For the year, the S&P 500 rose 26.9%, the Nasdaq added 21.4%, the DJIA increased 18.7% and the Russell 2000 closed up 13.7%.
We’ll do it all over again in 2022, starting Monday, Jan. 3. Unlike other stock market holidays, New Year’s Day is observed by Wall Street only if it falls on a weekday.
Sign up for Kiplinger’s FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.
Other news in the stock market today:
- U.S. crude oil futures dropped sharply, by 2.3%, to $75.21 per barrel, but still closed out 2021 with returns of more than 55%.
- Gold futures posted a 0.8% gain to $1,828.60 per ounce on Friday, but finished the year with a 3.6% decline.
- Bitcoin prices stumbled into the finish, declining 2.8% to $45,879.97 on New Year’s Eve. That said, Bitcoin gained more than 58% in 2021. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
- A couple of the S&P 500’s worst stocks came from the media industry, with Discovery (DISCA, -3.7%) and Viacom (VIAC, -3.0%) posting moderate losses on no news.
- Mohawk Industries (MHK, +2.4%) and Bio-Techne (TECH, +1.7%) were among the index’s top stocks Friday.
Looking Back at a Phenomenal 2021
When 2022 arrives, we’ll resume our examinations of the best investing opportunities for the new year. But for now, let’s take a moment to celebrate the fruits of 2021.
“This year will go down as one of the best ever for the bulls,” says Ryan Detrick, chief market strategist for LPL Financial. “The fact that 2021 had the second most all-time highs ever [at 70 for the S&P 500, only behind 1995’s 77] probably tells the story better than nearly any other. The S&P 500 had only one 5% pullback all year, and that was during the Evergrande worries in September/October.”
Detrick adds that every single month of 2021 included a new all-time high – only the second time that’s ever happened, with the first coming in 2014 – and that the current bull market has doubled faster than any other.
As for individual stocks, more than two-thirds of the Dow finished 2021 in positive territory. Our look at the industrial average’s best and worst components shows that the top performers finished the year with gains of more than 50%.
And yet as stunning as those returns might be, they’re nowhere close to those generated by the best-performing stocks of the much broader Russell 1000, which encompasses the market’s 1,000 largest stocks. The 25 best bets recorded gains of at least 93% in 2021. Most of the names at least doubled, while shareholders in 2021’s market leader enjoyed eye-popping returns of more than 700%.
Read on as we look at the 25 best-performing stocks of 2021.
3 Price Stocks You will Regret Not Shopping for on the Dip
Column: Clock ticks on lofty U.S. stocks
These 2 SaaS Shares Have Shareholders Jumping for Joy