Wall Street finishes tumultuous, pandemic 2020 at record highs

The broad-based S&P 500, which swooned below the 2,200-point level at its nadir in March, finished the year at 3,756.07
Last Updated : 01 January 2021, 05:25 IST
Last Updated : 01 January 2021, 05:25 IST

Follow Us :


Wall Street indices finished 2020 at all-time highs on Thursday, a surprising conclusion to a year in which the United States endured a recession caused by the deadly Covid-19 pandemic that continues to plague the country.

The Dow and S&P 500 finished at fresh records, capping a year in which they, along with the Nasdaq, scored significant gains even amid elevated joblessness, rising hunger and acute pain in sectors such as hospitality, airlines, oil and gas and the performing arts.

"For Main Street, it was a terrible year," said Briefing.com analyst Patrick O'Hare. "For Wall Street, it was a fantastic year."

The broad-based S&P 500, which swooned below the 2,200-point level at its nadir in March, finished the year at 3,756.07, up 16.3 percent for the year.

European equity markets had a mixed year, with Frankfurt higher, but Paris declined and London suffered its worst year since the global financial crisis.

The gains in US indices seemed impossible in March, when exchanges were forced to suspend trading as stocks went into free-fall as much of the US economy was shut down to combat the coronavirus.

The US didn't fully manage to get the virus under control, and concludes 2020 with its highest-ever single-day death toll of more than 3,900 people.

Yet, markets pivoted quickly from the fear of a depression-like collapse after the Federal Reserve stepped in with extraordinary stimulus and Congress mobilized to enact its biggest-ever fiscal package, the $2.2 trillion CARES Act.

Stocks began regaining ground in late March and rose for much of the summer. Volatility picked up again in the fall ahead of the November presidential election and as the infections spiked.

But Wall Street engineered a strong late-year rally as Covid-19 vaccines were approved and began to be rolled out, fueling hope for an economic recovery in the new year.

However, analysts see risks ahead in the first part of 2021.

"We've priced in a lot of the good news and not the bad news," said Art Hogan, chief market strategist at National Securities.

He expects the market in the upcoming period to fixate both on weakening economic data and on the virus's worrying spread.

"In large part, the market has done so well in 2020 because it is pricing in 2021," O'Hare said.

Back in Europe, Paris suffered a 7.1-percent drop but Frankfurt gained 3.6 percent in volatile record-breaking deals over the course of 2020.

London's FTSE 100 suffered a 14-percent drop for the year, its worst since 2008, but the British pound zoomed to a 2.5-year dollar peak before Britain's long-awaited exit from the European single market, with a trade deal in the bag on markets' final day of a coronavirus-ravaged 2020.

Britain's departure from the European Union takes full effect at 11:00 pm (2300 GMT), just hours after much of the country was moved into the top tier-four coronavirus restrictions.

The nation left the bloc on January 31 but has been in a standstill transition while it sought a free-trade agreement -- which was finally clinched on Christmas Eve and was approved by lawmakers on Wednesday.

That dispelled long-running fears of a chaotic no-deal departure that could have sparked a double-dip downturn, after Britain tanked into a recession earlier this year on coronavirus fallout.

"A Brexit deal may have come extremely late in the day but there will be a massive sense of relief that the UK won't be battling no-deal on top of everything else in the coming months -- and that relief can be seen in the pound," OANDA analyst Craig Erlam told AFP.

"It's ending the year on a high... It's all about the recovery now for the UK as it faces another devastating (virus) surge and most of the country moves into tier four."

Published 01 January 2021, 05:04 IST

Follow us on :

Follow Us