At the end of a year marked by significant volatility, the stock markets closed on Friday at the end of the old year barely changed from their open. The Dow was up 7.8 points, or 0.1%, closing at 11,577.51. The Nasdaq dropped 10.11, or 0.4%, to 2,652.87. Volume was light at 560 million shares.
Treasuries ended the year higher as yields dropped. Volume there was low as well, and the market closed at 2 PM Eastern on the final day of 2010. The 10-year Treasury yield fell 8 basis points, ending the year at 3.29%; 2-year Treasuries lost 5 basis points to close at 0.593%; and 30-year bonds lost 8 basis points, coming in at 4.338%.
At the end of a year that saw the flash crash—during which the Dow lost almost 1,000 points in a half hour—and in its wake, wholesale exits from the markets by small investors; debt troubles in the euro zone; and rampant unemployment and foreclosures at home, one might expect that the end of 2010 would see more trouble in the markets.
But the Standard & Poor's 500 stock index was up about 14% for the year, including dividends; it had its best December increase since 1991. The Dow Jones industrial average also rose about 14%, including dividends, and ended the year at its highest level since August 2008—before the worst of the financial crisis. The Nasdaq composite index did even better, finishing about 18% higher after dividends.
But of them all, the Russell 2000 index beat the Dow, the S&P and the Nasdaq handily. The small-cap stock index returned 27.8% in 2010, including dividends.
In 2010, the Dow fell from 11,205.03 on April 26 to its low for the year of 9,686.48 on July 2 and then recovered to end the year at 11,577.51.
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