Reversal Of Fortune
Stocks closed out Y2K on a gloomy note which was completely the opposite way
they entered the year. With Internets and techs mauled by a vicious ten-month
bear, the Nasdaq closed down 40% for the year and 52% off of its March 10
all-time high. Friday’s 3.4% decline served as yet another kick in the pants for
tech holders who were likely pleased to see the year draw to a close.
Financials and cyclicals also retreated, and that helped sink the Dow by 0.7%
and the S&P 500 by 1.0%. For the year, the Dow lost a little under 10% while
the S&P 500 slid a little above 10%.
Nasdaq volume increased abut 14% above Thursday’s level, as a hefty 2.47
billion shares changed hands. NYSE volume held steady with 1.02 billion shares
changing hands.
“The close of today’s market is likely to bring many sighs of relief as regards market performance in the year 2000. But once again,
investors in Wall Street have learned that there is no certainty like uncertainty, and all eyes are expected to be on the Fed in January to see if the
Fed will be friendlier to the economy and to the market,” said Alan Ackerman, Market Strategist,
Fahnstock & Co.
“Certainly yesterday’s consumer confidence figure is starting to feel some of the shock of the slowdown. We remain in the tug-of-war between a hard
landing ahead and a soft landing, and many believe that the GDP could fall below
1% in the first quarter and/or the second quarter of next year. So, for me, as the Fed goes, so goes the
market,” he added.
Top performing sectors were airlines
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PowerRating), up 3.9%, telecom
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up 1.5%, retailers
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PowerRating), up 1.2%, and transportation
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up 1.1%.
Weakest sectors were the usual suspects with Internets
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PowerRating), down
4.7%, semiconductors
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PowerRating), down 4.4%, and computer technology
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PowerRating),
down 3.0%.
Stars of the year that few expected to come out on top included Philip Morris
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PowerRating), which hit a 52-week high Friday before closing down 5/8 to 44. The
tobacco and food giant posted a gain of more than 90% for the year.
The best stock picker of the year, according to Frank Gretz of Shields and
Co. was Granny. “That’s right, Granny. Granny owns those nice safe niche
stocks called utilities. As measured by the Dow Jones Utility Average, Granny
gained more than 45% for the year,” he said.
But among the tech carnage, the real standout of the year was the Oracle of
Omaha himself, Warren Buffett. Buffett’s Berkshire Hathaway hit a multi–year
low of 41,300 on March 10, the same day the Nasdaq peaked. Berkshire closed out
the year Friday up 1300 to 71,000, its highest level since July 1999, which gave
Buffett more than a 70% jump from those March lows.
Looking ahead, the National Association of Purchasing Managers report will be
released at 10;00 AM ET on Tuesday. Analysts expect a figure of 47.7 for the
December report.