Stocks on Wall Street fell on Wednesday, as the S&P 500 ran out of steam in the last trading session of 2014 after reaching record highs on Monday, while Brent crude ended the year with a near-50 per cent plunge since June.
European indices wrapped up the year on a more upbeat note, rebounding from their October lows and cutting their overall losses for 2014.
The broad measure of US stocks closed 1 per cent lower at 2,058.90 in New York, just two days after reaching its best ever closing reading of 2,090.57 on Monday. The blue-chip Dow Jones Industrial Average fell 0.3 per cent to 17,927.97 in thin holiday trading.
The S&P dip – about half of which came in the final 30 minutes of 2014 trading – was enough to erase the gains made earlier in the month. As a result, it retreated in December for the first time since 2007.
The Stoxx Europe 600 Index climbed 0.4 per cent as European stocks recorded their third consecutive annual increase in value.
Over the year, the S&P 500 has outperformed its European peers – though not Dublin’s Iseq – and most of its major Asian counterparts as the Federal Reserve has carefully calibrated its guidance on the timing of the first rise in interest rates since the financial crisis, which is now seen as likely in the middle of 2015. The extended period of cheap money, coinciding with a strong economic rebound and contained inflation, has sparked a bull-run in equities at the same time as a sustained dollar rally.
Crude oil declined to cap its worst year since 2008 amid a global supply glut, dragging commodities to a fourth straight annual drop. The Bloomberg Commodity Index, which tracks 22 products from crude to copper, decreased 1.7 percent for a 17 per cent slide in 2014.
Dublin’s Iseq closed up 0.23 per cent in a shortened session which saw limited trading, finishing the year with a gain of over 15 per cent.
London’s FTSE 100 rose 0.3 per cent to 6,566.09 in a shortened trading day. The rise trims the main UK index’s loss for the year to 1.5 per cent, but also lifts it 5.8 per cent off its closing low for the year reached in October.
Frankfurt’s Xetra Dax 30 closed for the year on Tuesday, when a 1.2 per cent fall trimmed its gain for 2014 to 2.7 per cent. In Paris, the CAC 40 rose 0.7 per cent to 4,273.72, leaving it down just over 1 per cent since January but around 9 per cent off its weakest close for the year, also reached during the October slump.
Looking ahead to 2015, Howard Archer, chief European economist at IHS Global Insight, said: "While the euro zone clearly still has serious underlying problems, we believe the beneficial impact of likely sustained very low oil prices, a markedly weaker euro and increasingly accommodative monetary policy kicking in can help growth improve." – Copyright The Financial Times Limited 2015 / Bloomberg
