Filed under: Other issues, Google (GOOG), Microsoft (MSFT), Apple Inc (AAPL), eBay (EBAY), Indices, Countrywide Financial (CFC), S and P 500
2007 was not a fun year for many investors. The stock market wasn’t just volatile, it was downright manic, swooning between euphoric highs and cataclysmic depressions in the blink of an eye.
Stocks took frequent and at times unjustified beatings as investors fretted about everything from the subprime mortgage crisis to political instability in the Middle East. Nonetheless, the major indices ended the year on a positive note, which indicates that at least some people on Wall Street, including Warren Buffett, see reason for optimism.
For example, the S&P 500 Index ended this year up 3.5%, which should give millions of index fund investors reason to celebrate in their own quiet, conservative way. The big winners were energy companies, which according to Bloomberg News, gained 34% as a group. National-Oilwell Varco Inc. (NYSE: NOV), the biggest oilfield services company, surged 143% through December 28, the most of any company in the index, Bloomberg says, adding that the biggest loser was Countrywide Financial Corp. (NYSE: CFC), not surprisingly.At times things looked much worse. But tech investors ruled the day this year, sending the Nasdaq Composite Index up 7.94%, buoyed by gains in such stalwarts as Apple Inc. (NASDAQ: AAPL) (up 136%), Google Inc. (NASDAQ: GOOG) (up 52%) and Microsoft Corp. (NASDAQ: MSFT) (up 20%). Even eBay (NASDAQ: EBAY), Wall Street’s least favorite tech stock, finished the year with an 11% gain. The Dow Jones industrial average gained 6.4%.
Looking ahead, 2008 isn’t going to be much better, at least at first. The housing market shows no signs of rebounding from the wost downturn in 16 years, which as Bloomberg notes, “likely means economic growth next quarter will be less than 2 percent and the Federal Reserve will respond by cutting interest rates again, economists predict.”
The Wall Street Journal notes that analysts expect the market to remain “choppy” until the subprime write-downs begin to slow down. That’s a nice way of reminding investors to keep their flotation devices inflated and to take plenty of seasickness medicine.
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