Only one week ago, it appeared that at least two of the three major U.S. stock market indices were headed for a Year To Date loss. However, with last week’s gains the Dow Jones, Nasdaq and S&P 500 could all end 2011 in positive territory – depending on how they fare in the final trading sessions of the year.
Dow Jones 2011 YTD Performance
The Dow Jones Industrials Average index (.DJI), which is made up of 30 component stocks including Wal-Mart Stores, Alcoa Inc., The Walt Disney Company, The Coca-Cola Company and General Electric, began 2011 at 11,577 points – well removed from its 2007 peak and also well above its 5-year low in 2009. So far this year, the Dow Jones has increased 716.49 points, or 6.19 percent, and currently sits at 12,294 heading into the final week of yearly trading.
The Dow has traded in a range of 10,404.49 to 12,876.00 for the 2011 calendar year, reaching its yearly peak in April and falling to its annual low in October. Financial stocks held back the Dow for 2011, with both JPMorgan Chase & Co. and Bank of America Corp. poised for yearly losses. On the other hand, McDonald’s Corporation (NYSE:MCD) is up over 30 percent YTD – heading into the final week with a stock price of $101.15 per share and a Price to Earnings ratio of 19.63. Below is a chart showing the yearly performance of McDonald’s Corporation’s stock.
Another top gaining Dow component stock for 2011 has been International Business Machines Corporation (NYSE:IBM), which has enjoyed close to a 26% YTD increase and begins the final week of trading at 184.75 per share. IBM has a Market Capitalization $217.75 billion and a P/E ratio of 14.62 and reported $12.64 EPS in its most recent financial statement.
Below are two stock charts. The first shows IBM’s YTD surge and the second represents the Dow Jones Industrials Average’s Year To Date performance.
Nasdaq Composite 2011 YTD Performance
The Nasdaq Composite index, which is comprised of 100 technology stocks including Apple Inc., Microsoft Corporation and Netflix, will need to have an impressive final week of trading in order to end 2011 out of the red. The index is down a total of 34 points Year To Date, but could make up that 1.3% yearly loss depending on stock market sentiment during the upcoming week.
The Nasdaq 100 has traded in a YTD range of 2,298.89 to 2,887.75 points after beginning 2011 at 2,652. The index closed Friday, December 23rd, at 2,618 points. The Nasdaq Composite index Year To Date chart for 2011 is displayed below.
S&P 500 2011 YTD Performance
The S&P 500 index is comprised of 500 stocks and has posted a modest gain of 7.69 points, or 0.61 percent, so far in 2011 while trading within a 1,074.77 to 1,370.58 YTD range. Below is a chart that represents the yearly performance of the S&P 500 index.
Eurozone Dominates Market News
News out of the European Union has dominated market news for the final half of 2011, as sovereign debt concerns tied to Greece have spread throughout the region and threaten to leave several countries scrambling for funds. Both Italy and Greece saw their government majorities collapse in late 2011, with former Greek Prime Minister George Papandreou replaced by Lucas Papademos and former Italian leader Silvio Berlusconi being ousted in favor of Mario Monti.
A number of EU countries may face harsh austerity measures in 2012 as they seek access to bailout loans from the European Central Bank. Although the ECB approved €489 billion in rescue loans to struggling financial institutions in the area this month, the banks – for the most part – have not used those funds to bolster sovereigns with bond purchases. The US Dollar has benefited from a flight of assets into perceived safety as the EU works to calm investor jitters.