Stocks rise on last trading day of 2014

NEW YORK — U.S. stocks are rising moderately on the final day of 2014 today, keeping the market on pace for its sixth consecutive year of gains.

KEEPING SCORE: The Dow Jones industrial average rose 35 points, or 0.2 per cent, to 18,020 as of 9.55 a.m. Eastern. The Standard & Poor’s (S&P) 500 index rose two points, or 0.1 per cent, to 2,083 and the Nasdaq composite rose 12 points, or 0.3 per cent, to 4,790.

ASIA JUMPS: Chinese stocks surged after a weak manufacturing report reinforced hopes for new stimulus as growth in the world’s No. 2 economy slows.

Manufacturing in China contracted in December, according to an HSBC survey, the latest sign of a slowdown there. Markets were expecting that outcome since a preliminary version of the survey released earlier in the month also showed a contraction, but the confirmation underpinned hopes for more government stimulus.

NEW YEAR OUTLOOK: “Heading into 2015, many of the challenges the market has faced this year will be recurring,” said Mr Stan Shamu, market strategist at IG in Melbourne, Australia. Analysts say investors will be preoccupied by the slowdown in China, the economic malaise in Europe and Japan, and the possible timing of the U.S. Federal Reserve’s first interest rate hike since the financial crisis. “The beginning part of the year will be dominated by Europe and then we’ll switch to the U.S. toward the middle of the year,” said Mr Shamu.

DOUBLE DIGITS: The S&P 500 is on pace to close up 12.6 per cent for 2014, or 14.9 per cent when dividends are included. That’s roughly double what strategists expected for the market at the beginning of the year. Most strategists believe the stock market will also rise in 2015, however gains will be more modest, between 4 per cent and 6 per cent.

QUIET END: Trading is expected to be light Wednesday since it is New Year’s Eve and most fund managers have closed their books for the year. U.S. markets will be closed Thursday for New Year’s Day and will reopen Friday, however trading is also expected to be slow Friday.

OIL PRICES: Benchmark U.S. crude dropped US$1.48 (S$1.96) to US$52.64 (S$69.73) a barrel on the New York Mercantile Exchange. The price has plunged by half since June amid abundant supplies of oil and weak global demand. The contract rose 51 cents on Tuesday.

CURRENCIES: The euro dropped to US$1.2149 from US$1.2162 late Tuesday. The dollar rose to 119.52 yen from 119.47 yen. AP