Wall Street

US stocks end 2016 on weak note as tech stocks hit

Wall Street stocks finished a torrid year on a tepid note, with Apple and other large technology companies leading the market lower following a sluggish session Friday.

The Dow Jones Industrial Average dipped 0.3 percent to end the year at 19.762.60
The Dow Jones Industrial Average dipped 0.3 percent to end the year at 19.762.60 (Bryan R. Smith | AFP)

NEW YORK - Wall Street stocks finished a torrid year on a tepid note, with Apple and other large technology companies leading the market lower following a sluggish session Friday.

Analysts said volume was low due to the holidays and some investors were reallocating funds from stocks to bonds after a big rally in equities following the November election.

Some analysts said investors also were skittish over bad memories of January 2016, when global stocks stumbled badly amid fears over slowing Chinese growth. But most markets later recovered and rallied to finish the year higher.

The Dow Jones Industrial Average dipped 0.3 percent Friday to end the year at 19.762.60, failing to hit the 20,000-point milestone which seemed attainable in the wake of the US elections.

The broad-based S&P 500 lost 0.5 percent to close at 2,238.83, while the tech-rich Nasdaq Composite Index dropped 0.9 percent to 5,383.12.

Facebook, Google parent Alphabet and Microsoft all fell one percent or more. Amazon lost 2.0 percent and Apple 0.8 percent.

However, Friday's losses barely put a dent in an otherwise robust year for US stocks, with the market maintaining most of its winnings since the Republican sweep of the November US elections, which sparked hopes of more growth-friendly policies from Washington.

The Dow finished the year up 13.4 percent while the S&P 500 rose 9.5 percent and the Nasdaq 7.5 percent.

"The market is drifting but poised to close the year with triumphant gains of the indices," said Peter Cardillo, chief market economist at First Standard Financial.

"What really happened today is not indicative a changing trend."

US stocks fell during most of the post-Christmas week, a shift from the bullish trend since the election. But analysts remain upbeat about the prospect for US stocks in 2017.

Investors largely have disregarded worries about the unpredictable Trump, including fears his tough posture towards China could lead to a trade war.

Instead, Trump and congressional Republicans are expected to join forces to enact tax cuts and regulatory reform, and ramp up public works spending.

Expectations are high for Trump's first 100 days, which are anticipated to include progress on these key items, said Sandy Sanders, a senior portfolio manager at Manulife Asset Management.

"Everyone is going to be laser-like focused on what's going through Congress and the Senate and then to the president's desk and they're going to want to see deliverables on that tax reform," Sanders said.