Recapping The Year–And What A Year It Was

Stocks were slightly lower this last trading day of
2004. It was the second straight year of gains for the indices. After
a listless, low volatility first half, the second half of the year saw stocks
accelerate nicely to the upside.

The Russell 2000 outperformed the S&P 500 for the sixth straight year.

Eli Lilly
(
LLY |
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Prozac may be linked to aggressive behavior. The FDA is reviewing the documents,
which disappeared after a 1994 civil suit against the company. LLY is 56.81,
down 1.20.

The FDA approved Pfizer’s
(
PFE |
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pain.

Boeing
(
BA |
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of $500 million. Earlier this week, Continental Airlines ordered 10
planes.

If you’re wondering why the market was open today, it’s thanks to NYSE Rule
51, which states that the when a holiday occurs on a holiday on Saturday, the
market is closed on Friday, unless it’s the end of a monthly or yearly
accounting period. Today obviously closes out the year. And there you have it.

The three top underwriters for 2004 were: Citigroup ($534.5 billion),
Morgan Stanley ($413.6 billion) and JP Morgan ($385.8 billion).

On a sad note, Martha Stewart lost a Christmas decorating contest in
Alderson prison. Prisoners were give $25 to decorate; Martha’s oragami paper
cranes lost out to a nativity scene.

In a survey of traders, these were the top trading stories in 2004:

1. the election

2. China/commodities

3. weak dollar

4. too many hedge funds

5. lack of volatility

6. Eliot Spitzer

7. growth of ETFs/program trading

Two big stories of 2004 were 1) Oil, which rose 33.7%; in November it closed
over $55. 2) The dollar fell 8% vs the euro. The Yen rose 4.4% vs the dollar. In
2003, the dollar fell 20%.

2004 Index Performance

Transports     +27%

Utilities          +26%

Russell 2000  +17%

S&P 500        +9% (with dividends,
11%)

Nasdaq          +8.6%

Dow               +5.8%

2004 World Index Performance

Great Britain    +7.5%

France            +7.4%

Germany         +7.3%

Japan             
+7.6%

Mexico            +47.5%

Strong sectors were:  Oil Services
(
OSX.X |
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Semis
(
SOX.X |
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(
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Weak sectors were:  Airlines
(
XAL.X |
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(
GIN.X |
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Brice Wightman