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U.S. Stocks post worst year in a decade as S&P 500 falls...
30 Dec 2018

Wall Street concluded a tumultuous 2018 on Monday as the major stock indexes posted their worst yearly performances since the financial crisis.

U.S. stocksAfter solid gains on Monday, the Dow Jones industrial average was down 6.2 percent and 5.6 percent, respectively, for 2018. Both indexes logged in their biggest annual losses since 2008, when they plunged 38.5 percent and 33.8 percent, respectively. The Nasdaq lost 3.9 percent in 2018, its worst year in a decade when it dropped 40 percent.

The S&P 500 and Dow fell for the first time in three years, while the Nasdaq snapped a six-year winning streak. 2018 was a year fraught with volatility, characterized by record highs and sharp reversals. This year also marks the first time ever the S&P 500 posts a decline after rising in the first three quarters.

For the quarter, the S&P 500 and Dow plunged 13.97 and 11.8 percent, respectively, their worst performances since 2011. The Nasdaq plunged 17.5 percent in the period, its biggest quarterly fall since 2008.

A sizable chunk of this quarter’s losses came during a violent December. The indexes all dropped at least 8.7 percent for the month. The Dow and S&P 500 also recorded their worst December performance since 1931 and their biggest monthly loss since February 2009.

Investors dumped stocks this month amid concerns of an economic slowdown and fears the Federal Reserve might be making a monetary policy mistake. Concern over ongoing trade negotiations between China and the U.S. have also pressured stocks this month.

But that doesn’t explain just how wild a ride December was for investors. At its low price on Christmas Eve, the S&P 500 was down more than 20 percent from its record high on an intraday basis, briefly meeting the requirement for a bear market. The stock market would come soaring back in the next session, with the Dow jumping more than 1,000 points on Dec. 26, its biggest-ever point gain.

Traders had trouble pinpointing the cause of the extreme volatility, with some chalking it up to computer-driven trading.

The major averages trimmed some of their sharp annual losses on Monday in hope of trade progress between China and the U.S. The Dow climbed 265 points, while the S&P 500 and Nasdaq both gained 0.8 percent.