Issue link: https://www.epageflip.net/i/51514
8B Daily News – Saturday, December 31, 2011
NEW YORK (AP) — The stock market ended a tumultuous year right where it started. In the final tally, despite big climbs and falls, unexpected blows and surprising triumphs, all the hullabaloo proved for naught. On Friday, the Standard & Poor's 500 index closed at 1,257.60. That's exactly 0.04 point below where it started the year. ''If you fell asleep January 1
After many ups and downs, stocks end flat for 2011 Wall Street
S&P 500 rose 11 percent. The Dow Jones industrial average, comprising 30 big stocks, climbed 1,344 points, or 12 percent. That was the largest quarterly point gain in its history. The Dow closed up 5.5 percent for the year.
— Best of the bad. U.S. stocks
and woke up today, you'd think nothing had happened,'' says Jack Ablin, chief investment officer of Harris Private Bank. ''But it's been up and down all year. It's been crazy.'' It was a year when U.S. compa- nies were supposed to run out of ways to make big profits. But they didn't, and in fact generated more than ever. It was a year when the U.S. lost its prized triple-A credit rating, which should have spooked buyers of its bonds. Instead investors bought more of them and made Treasurys one of the best bets of 2011. It was a year when stocks caught fire, then collapsed to near bear-market lows. Among stocks, there were some surprising winners. Scaredy- cat investors who bought the most conservative and dullest of stocks — utilities — gained 15 percent this year, the biggest price rise of the ten industry sectors in the S&P 500. Other winning groups were consumer staples, up 11 percent, and health care companies, 10 per- cent.
Other market curiosities: — Bad year, great quarter. Despite disappointing returns in 2011, the last three months of the year were impressive, which could bode well for the new year. The
delivered little this year, but other markets did even worse, including ones in fast-growing economies. Brazil's Bovespa index fell 18 per- cent in 2011. Hong Kong's Hang Seng dropped 20 percent. In Europe, many of the biggest mar- kets ended down in 2011. Britain's FTSE 100 lost 5.6 percent, Ger- many's DAX 14.7 percent. — Buy American is back. A broad index of the Treasury market gained 9.6 percent, despite the fact that the U.S. government is now slightly less likely to repay its debt, at least according to Standard & Poor's. In August, the rating agency stripped the U.S. of its triple-A rating, citing mounting U.S. debt and political squabbling over what to do about it. For stock investors, 2011 was-
n't supposed to end this way. At the start of the year, the Great Recession was officially 1 1/2 years behind us and the recov- ery was finally gaining momen- tum. The economy added an aver- age of more than 200,000 jobs a month in February, March and April. And U.S. companies kept reporting big jumps in profits, defying naysayers. The stock market roared in
approval. On April 29, the S&P closed at 1,363, double its reces- sionary low of March 2009.
Then manufacturing slowed, companies stopped hiring and con- sumer confidence plummeted, tak- ing with it those hopes of big stock gains for the year. Adding to the misery, Japan was rocked by an earthquake and tsunami. That shut down factories run by crucial parts suppliers to U.S. firms, in particu- lar auto makers. Gridlock in Washington didn't help. After much squabbling, politicians eventually decided to raise the cap on how much the fed- eral government can borrow in early August. But the heated debate took its toll. The Dow Jones industrial average swung more than 400 points four days in a row — down and up and down and up. Overhanging it all was fear that the debt crisis in Greece had spread to Italy and Spain, countries too large for other European nations to bail out. Talk of another blockbuster year for stocks turned to dark mus- ings about the possibility of anoth- er U.S. recession. And so stocks kept falling. On Oct. 3, stocks had dropped 19 percent from their April high. That was just one point short of an official bear market. Since then, U.S. housing starts
have increased, factories are pro- ducing more, unemployment claims fell and U.S. economic growth rose. And companies are still generating impressive profits. Those in the S&P 500 have increased profits by double-digits percentages for nine quarters in a row.
The good news pushed stocks up in the closing months of the year.
The biggest winner in the Dow was McDonald's Corp, up 31 per-
cent for the year. Bank of America Corp. was the worst performing stock, down 58 percent. Including dividends, the S&P 500 returned 2.11 percent for 2011. That means investors lost money after inflation, which was running at 3.4 percent in the 12 months ending in November. At least they're getting more than investors in the benchmark 10-year Treasury note, which currently pays a yield of just 1.88 percent. The outlook for stocks in the
new year is either great or grim, depending on your focus. Italy has to repay holders of $172 billion worth of it national bonds in the first three months of 2012. It will do so by selling new bonds. The question is how much interest they will demand to be paid to compensate for the risk they're taking on. If they demand too much, fear could spread that the country will default. That could sink stocks.
After Italy was forced to pay
unexpectedly high rates in a bond auction earlier this month, stocks fell hard around the world. There are also questions about whether China's economy is slow- ing too much and whether the U.S. politicians will agree to raise the debt ceiling again in 2012 or extend Bush-era tax cuts. On the bright side, stocks seem to be well-priced.
The S&P 500 is trading at 12 times its expected earnings per share for 2012 versus a more typi- cal 15 times. In other words, they appear cheaper now. Partly based on that many strategists, stock ana- lysts and economists expect the index to end next year at 1,400 or more, up 10 percent or so.
California Outdoors Q&As When Special Fishing Regula-
tions Differ on the Same River Question What are the bag limits for waters that have special regulations for trout? In some cases, specifically the middle fork of the Stanislaus River, the river is broken down into sections. For example, from the Beardsley Dam down to the Spring Gap Bridge there are certain restrictions and the bag limit is two fish of at least 14 inches. From the same bridge down to New Melones Lake there are no special restrictions and the bag limit is two fish. If you fish on one side of the bridge following the special restrictions (only artificial lures and barbless hooks) and you keep two fish that are at least 14 inches, can you also be in possession of two fish from the other side of the bridge that allows any type of bait and hook? Meaning you would be in possession of four fish because they were caught essentially under the bag limit of the two different bodies of water based on the regu- lations. Also, how would you be able to prove to a game warden if they ask about the additional two
fish that you caught up river beyond the bridge? (Larry G.) Answer You may not exceed the daily bag or possession limit for the location where you are cur- rently fishing, regardless of where you caught the fish. In your exam- ple, the daily bag limit is two fish, and you cannot exceed that limit on the same day even if you fish multiple segments of the river. For an alphabetical list of
waters with special fishing regula- tions, see California Code of Reg- ulations Title 14, section 7.50. In the current California Freshwater Sport Fishing Regulations booklet, they can be found beginning on page 30.
Combo shotgun/rifles Question I was told recently by my gunsmith that it's illegal to use a double gun - a rifle/shotgun combo, like the Savage Model 24 - when hunting birds in California. Do you have any knowledge of this or any idea of who to ask? (Dave and Jim M.) Answer
Combination
rifle/shotguns used to be fairly common and are making a bit of a comeback. According to Depart-
ment of Fish and Game (DFG) Lt. Todd Tognazzini, they are legal to carry as long as the method match- es the species being hunted. If the person is hunting for a species where the use of the rifle or shot- gun is restricted or not permitted, they may not have ammunition for the restricted barrel. For example, if a person is hunting turkey with a 12 gauge shotgun using No. 2 shot, but they also have .22 caliber ammo in possession, this could result in a citation.
Hunting with these combo guns also restricts the hunter to one shot. For example, if shooting turkeys with the shotgun barrel, the hunter would have to reload another shotgun shell if they missed or needed a backup shot. If the other barrel is being used for anything except small game, lead restrictions would apply. And if hunting in the Condor Zone, lead restrictions would also apply! Fishing for mussels? Question What are the regula- tions for taking mussels? Can they be taken year-round or do they have a specific season? (Tom W.) Answer Mussels may only
legally be taken by hand and there is no size limit, but only 10 lbs. of mussels in the shell may be taken each day. By law, mussels may be taken year-round, but the Califor- nia Department of Public Health (CDPH) monitors and annually quarantines the take of mussels for human consumption to prevent cases of paralytic shellfish poison- ing and domoic acid poisoning. The quarantine is usually in effect from May through October. Before you go, check with CDPH for daily updated information on quarantines and naturally occur- ring shellfish toxins by calling their Shellfish Biotoxin Informa- tion Line at (510) 412-4643 or toll- free at (800) 553-4133 or by checking online at www.dfg.ca.gov/marine/healthad- visory .asp