Stocks finished near the day's lows Monday, the last trading session of 2001, as traders squeezed in last minute tax loss selling and profit-taking. Trading was thin ahead of the New Year's Day holiday on Tuesday.
Monday's session confirmed 2001 was the worst year for the broad market since 1974, when the S&P 500 fell nearly 30%, according to wire reports. The Standard & Poor's 500 index fell 13% for the year, while the blue-chip Dow Jones industrial average fell 7%. The tech-heavy Nasdaq declined 21% in 2001.
Hopes for an economic recovery in 2002, however, have lifted the market well off its three-year lows on Sept. 21 following the September 11 attacks. The S&P 500 has rallied more than 20% since late September.
Among the biggest losers on Monday were biotechnology stocks along with ImClone Systems (IMCL) on news the FDA is not accepting its filing for its colorectal cancer drug Erbitux. Shares of ImClone plunged 16%. Other tech areas such as semiconductor and software were also weaker.
However, airline stocks moved higher as America West (AWA) surged 40% on news it has reached conditional approval for $380 million in federal loan guarantees. Diverse chemicals and container stocks were also gaining ground.
The stock market had a regular trading session on Monday, New Year's Eve, but will be closed on Tuesday, Jan. 1, in observance of New Year's Day. Trading resumes on Wednesday, Jan. 2.
The Dow Jones industrial average was down 115.35 points, or 1.14%, to 10,021.64. The Nasdaq composite index slipped 36.19 points, or 1.82% to 1951.07. The broader S&P index was off 12.87 points, or 1.11% to 1148.15.
Mayor Rudy Giuliani, who is in the final days of his eight-year term as New York City's mayor, rang the final closing bell of the year at the New York Stock Exchange.
The euro, meanwhile, posted gains as the countdown began towards the midnight launch of euro notes and coins in 12 countries. Banks loaded the new bills into cash machines as regional observers celebrated the event as a milestone in European integration, according to wire reports.
Bond trading concluded at 2 p.m. EST with U.S Treasuries recording gains on very light buying, as equities lost some ground. Treasuries also were boosted by a report showing manufacturing activity in New York City improved sharply in December.
Later in the week, the market will begin the new year with key economic reports including the Institute for Supply Management's (formerly National Association of Purchasing Management) December survey of manufacturing activity on Wednesday. And on Friday, the December employment report is due.
Looking back on 2001, it was a notable year for Treasuries. The Fed slashed short-term rates by a whopping 4.75 percentage points to 1.75 percentage points, a 40-year low, in one of the central bank's most aggressive rate-cutting campaigns to halt the economic slowdown.
Most European markets were closed for the new-year holiday. In London, though, the Financial Times-Stock Exchange 100 index was open for half a day on Monday and finished down 25 points, or 0.48%, to 5,217.40.
On Friday in France, the CAC 40 gained 33.42 points, or 0.73%, to 4,624.58. Also on Friday in Germany, the DAX Index was higher by 42.97 points, or 0.84%, to 5,160.10.
In Japan, the markets were closed for the holidays. On Friday, the Nikkei gained 85.01 points, or 0.81%, to 10,542.62. The markets in Japan will be closed from Monday through Thursday. In Hong Kong on Monday, the Hang Seng shed 34.38 points, or 0.30%, to 11,397.21.