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Wall Street closed out 2003 quietly, as investors spent the last day of the year collecting some of their gains from the stock market's first winning year since 1999. Though stocks moved only slightly on Wednesday, the Dow Jones industrials rose 25.3% for the year, the Nasdaq composite rose 50%, and the Standard & Poor's 500 gained 26.4%.
The InformationWeek 100 did better than any of the other indexes, rising nearly 55% to end the year at 314.99 despite losing 0.94 points, or 0.3%, on Wednesday.
On the year's final day of trading, the Dow rose 28.88, or 0.3%, to finish the year at 10,453.92, its highest level since March 21, 2002. The broader market finished mixed. The Nasdaq fell 6.51, or 0.3%, to 2,003.37. The S&P 500 rose 2.28, or 0.2%, to 1,111.92. The Nasdaq 100 tracking stock lost 10 cents to $36.46 as more than 83 million shares changed hands.
On a percentage basis, the Dow notched its strongest gain since 1996 and the S&P saw its best since 1998. The Nasdaq had its third-best performance ever, behind a 57% rise in 1991 and an 86% gain in 1999.
For the month, the three main indexes posted a gain, with the Dow up 6.9 percent, the Nasdaq higher 2.2 percent and the S&P up 5.1 percent.
Stocks gained in recent weeks on investor optimism for the strong earnings growth in 2004. But with the main gauges trading at their highest levels in nearly two years, analysts say valuations might be getting a bit high. That's quite a contrast from a year ago, when apprehensive investors began 2003 after being stung by three years of declines after the bursting of the tech bubble in early 2000 and uncertain about the economy as the United States headed toward a war with Iraq.
The end of active combat in the Mideast in the spring cheered investors, who also rallied behind tax cuts and another interest rate cut later in the year. In December, the Dow surpassed 10,000 for the first time since May 2002 and the Nasdaq exceeded 2,000, a mark last seen in January 2002.
A lot of analysts expect more modest growth in the new year--about 10%, as the risk of rising interest rates grows and the effect of tax cuts loses effect.