Dow closes on higher note

NEW YORK - Wall Street saw a merciful end to a dreadful year yesterday as stocks closed the last session of 2008 with a sizable advance.

The Dow Jones industrials rose 108 points to 8,776 - but plunged nearly 34 percent over the year as the U.S. mortgage and credit crisis turned into a global recession. The year just ended marked the worst for the Dow since 1931.

Investors took some comfort yesterday from the Labor Department's report of a sharp drop in weekly unemployment claims. But many traders were out of the market, on vacation, or had closed their books for the year.

"They will write about this year for a long time," Duncan Niederauer, chief executive officer of NYSE Euronext, operator of the New York Stock Exchange, told Bloomberg News. "It's been, in one word,

tiring

."

Wall Street's stats for 2008 are testimony to how stunningly terrible the year was:

The Dow lost 33.8 percent for the year and was down 38 percent from its record close of 14,165.53 in October 2007, making it the Dow's worst year since 1931, when the country was deep into the Depression.

The Standard & Poor's 500 index, the indicator most watched by market pros, lost 38.5 percent in 2008 and is down 44.8 percent from its 2007 high of 1,565.15 The S&P 500's 52 percent decline at its November low was the worst since an earlier version of the index lost 54.5 percent from March 1937 to March 1938.

Yesterday, the Dow rose 108.00, or 1.25 percent, to 8,776.39. The S&P 500 rose 12.61, or 1.42 percent, to 903.25.

The Nasdaq composite index fell 40.5 percent during 2008 and ended the year off 44.8 percent from its most recent high in October 2007. The tech-heavy index peaked at 5,048.62 during the dot-com bubble at the start of the decade.

The Nasdaq rose 26.33, or 1.70 percent, yesterday to 1,577.03.

The Russell 2000 index of smaller companies rose 16.68, or 3.5 percent, to 499.45.

On Tuesday, stocks also rose, as investors applauded the government's decision to extend $5 billion to General Motors Corp.'s troubled financing arm, GMAC Financial Services L.L.C. Major stock indexes rose more than 2 percent in light trading, including the Dow, which added 185 points. Light volume can skew market moves.

Bond prices tumbled as stocks advanced yesterday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, jumped to 2.24 percent from 2.06 percent late Tuesday.

The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude jumped $5.57 to settle at $44.60 a barrel on light trading on the New York Mercantile Exchange.

Tim Speiss, head of the wealth management division at Eisner L.L.P., said that investors should not draw too much from the light holiday trading but said the drop in jobless claims and the financing for GMAC were encouraging.

"It's really tough to draw any kind of conclusions because of the low volumes," he said, adding that "new jobless claims are down; that's good."

World stock markets were seeing out 2008 in a bruised and confused state after a year of dizzying turmoil, with stocks in Europe and Asia little changed in light trading.

Britain's FTSE 100 rose 0.94 percent and France's CAC-40 added 0.03 percent. Markets in Japan and Germany were closed for holidays.

China's shares fell amid concern about a worsening economic slump, ending 2008 down 65 percent - the market's worst-ever annual performance - after global turmoil battered corporate profits. The benchmark Shanghai Composite Index fell 0.7 percent to close at 1,820.81.

Among the world's major indexes, Japan's Nikkei index tumbled 42 percent during 2008, its biggest loss since its inception 58 years ago, while Britain's FTSE 100 closed around a third lower than a year ago, its worst year since it was created in 1984.

Germany's DAX closed out 2008 Tuesday down around 40 percent on the year, its second-biggest fall in its 20-year history.