Dow Sizzled in 2013

The Dow Jones industrial average had a great 2013 — gaining roughly 3,475 points or 26.50%. This was the best annual percentage gain since 1995 and the largest point gain in the history of the index, according to an analysis by S&P Dow Jones Indices.

“For only the second time in the past 20 years, the annual close was also the yearly high,” explained Jamie Farmer, a managing director with S&P Dow Jones Indices, in the report released Thursday. (The Dow ended 2013 at 16,576.66.)

“Over the past 20 years, the annual close is, on average, about 6% off of the yearly high — in only four instances has that not been the case,” Farmer said. “The financial crisis of 2008 inflicted the most damage and left the close nearly 33 from that year’s high.”

The better news may be its longer-term performance. After declining 33.8% in 2008, the Dow had a five-year jump of 88.9%.

Even with the results of the recent recession, the Dow’s 10-year total performance was 58.6%, and it rose 33% in seven years.

Breaking It Down

What were some of the main sources of the Dow’s strong showing?

Overall, every industry contributed to the Dow’s blistering 2013 performance. (In 2012, technology and basic materials had a negative impact).

The best-performing sector was industrials, which added about 1,070 points. Financials contributed more than 700 points, and consumer services added 485.