- The Washington Times - Friday, January 1, 2010

NEW YORK | The stock market closed 2009 with a loss as investors bet the improving economy will lead the government to pull back on its stimulus measures.

Thursday’s trading came on extremely light pre-holiday volume. In the last day of the year, signs first pleased investors, then had them concerned about the economy’s ability to thrive without government help.

The thin volume exaggerated the market’s moves. The Dow Jones industrial average fell 120.46, or 1.1 percent, to 10,428.05. For the year, the Dow rose 1,651.66, or 18.8 percent.

The broader Standard & Poor’s 500 index, considered by professionals to be the market’s best barometer, fell 11.32, or 1 percent, to 1,115.10. The S&P; ended the year with a gain of 211.85, or 23.5 percent.

Meanwhile, the Nasdaq Composite Index fell 22.13, or 1 percent, to 2,269.15. Powered by the recovery in high-tech stocks, the Nasdaq ended 2009 with a gain of 696.12, or 43.9 percent.

The full-year stats are dwarfed by the indexes’ recovery from the depths of March, when they hit bottom. The Dow rose 3,881.00, or 59.3 percent from its March 9 close, while the S&P; 500 rose 438.57, or 64.8 percent, and the Nasdaq regained 1,000.51, or 78.9 percent.

News that weekly unemployment claims fell to the lowest level since July 2008 gave stocks an initial blip Thursday, but the market gave back the gains as traders took some profits to close out their books.

The Labor Department said new claims for unemployment benefits fell by 22,000 to a seasonally adjusted 432,000 last week. Analysts had expected claims would rise. The number of workers continuing to seek unemployment benefits fell by 57,000 to 4.9 million. Analysts predicted an increase.

Many investors think the stock market, which has had its best year since 2003, has seen the best of its gains for a while. So many of those working Thursday were moving money out of some stocks.

“Everyone is looking to put a ribbon on the year and wrap things up,” said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.

Most bond prices fell, pushing yields higher. The yield on the benchmark 10-year Treasury note rose to 3.84 percent from 3.79 percent late Wednesday. The 10-year yield began 2009 at 2.22, a reflection of investors’ high anxiety and need for the safety of government debt.

The Russell 2000 index of smaller companies fell 8.02, or 1.3 percent, to 625.39. It ended the year with a gain of 25.2 percent.

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