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US stocks hot in 2013

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US stocks have powered to fresh records during the last session of 2013, closing out a year of stunning gains that some analysts say could continue in 2014.

The new records for the Dow Jones Industrial Average and the broad-based S&P 500 capped the best year for American stocks since the 1990s and confirmed the recovery from the 2008 financial crisis.

Investors repeatedly bid up equities on a cocktail of loose monetary policy, corporate earnings growth and the steadily rebounding economy.

Tuesday’s gains, another 0.44 per cent for the Dow and 0.40 per cent for the S&P 500, came on the back of more positive economic data — consumer confidence was bouncing back from a lull and home prices continued to rise.

The Dow on Tuesday rose 72.37 points, to end the year at 16,576.66. It notched 52 new records during 2013 and gained 26.5 per cent, the blue-chip index’s best one-year percentage increase in more than 15 years.

The S&P 500 advanced 7.29 points, on the day to close at 1,848.36. It was up 29.6 per cent for the year – the largest one-year gain since 1997 – and smashed the record barrier 45 times..

The tech-rich Nasdaq Composite, while still well short of its all-time record, closed the year at its best level since the 2000 .com crash, adding 38.3 per cent for the year to 4,176.59. On the day, it was up 22.39 points or 0.54 per cent.

The vast majority of companies on the S&P 500 — 457 of them — gained for the year, illustrating the broad character of the year’s bull run.

“There were not a lot of losers,” said Howard Silverblatt at S&P Dow Jones Indices. “This was a very broad market.”

2013 “would rank up there as one of the best years in my memory,” said Greg Peterson, director of investment research at Ballentine Partners. “It was an extremely good year.”

The year’s breakout stocks included video streaming company Netflix, which more than tripled in value during 2013, and electric-car maker Tesla, which rose more than four-fold, ending the year amid rumours that it could be taken over by one of the auto majors.

Netflix, along with electronics retailer Best Buy and Micron Technology, were the three biggest gainers in the S&P 500, while Newmont Mining was the biggest faller, down more than 50 per cent as gold prices plunged 28 per cent during the year.

The biggest gainer on the Dow for the year was aerospace giant Boeing, which withstood a bumpy stretch related to its flagship 787 before rallying on strong global demand from airlines.

The only company on the Dow to fall was IBM, which gave up 2.1 per cent amid challenges to the legacy technology giant’s business from the new technology leaders.

Changes in index membership underscored the shifts in corporate power. On the Dow, Alcoa, Bank of America and Hewlett-Packard were replaced by Goldman Sachs, Nike and Visa.

The S&P 500 dropped slumping retailer J.C. Penney, which shed more than 50 per cent of its value, replacing it with social networking company Facebook, which more than doubled in 2013.

Twitter’s entry to the market, raising $1.8 billion, made some of the biggest news during the year. The still money-losing social network power’s stock quickly more than doubled from its offer price of $26 to above $63 Tuesday.

Other big IPOs came from hotelier Hilton Worldwide Holdings and oil pipeline operator Plains GP Holdings.

There was confidence among analysts that the bull market would continue into 2014, though many questioned whether the gains of 2013 could be matched.

Key questions concern the pace of the US economic recovery, and especially jobs growth, and how the market absorbs the hit from the Federal Reserve’s stimulus cutback.

Another big unknown is whether companies can grow revenues after record profits in 2013, as much of the gains came through cost-cutting.

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