New York: For the US stock market, 2011 was a long wild ride to nowhere.

The broad S&P 500 endured huge daily swings but a year of drama left the index almost where it started. It lost a mere 0.003 per cent, closest to unchanged since 1947, according to Standard & Poor's.

Global markets have been battered this year by the Eurozone debt crisis, upheaval in the Middle East, and US political gridlock. Similar events probably await investors in 2012.

"The earnings and fundamentals were there for companies, but the political crisis and paralysis in Washington and Europe were too much," said Martin Sass, who founded and runs the $7.5 billion (Dh27.52 billion) M.D. Sass hedge fund.

"They overwhelmed the fundamentals. I didn't think the Eurozone crisis would have been so protracted as it has become."

The Dow industrials gained 5.5 per cent for the year as investors sought safety in large-cap, dividend-paying stocks. The Nasdaq lost 1.8 per cent.

Investors took out their ire on the financials, which were the weakest group last year, falling more than 18 per cent. Concerns about exposure to Europe and the threat of a renewed financial crisis hurt those shares.

Worst performer

Bank of America Corp was the Dow's worst performer, tumbling 58.3 per cent last year, and it was also one of the S&P 500's biggest losers. JPMorgan Chase & Co slumped 21.6 per cent in 2011.

Cabot Oil & Gas Corp was the only S&P component to double its stock price in 2011 — rising 100.5 per cent — followed by another energy name, El Paso Corp, which rose 93.1 per cent. The S&P 500's weakest stock was First Solar, as shares of that company were hit by falling solar panel prices. For the year, the stock was off 74.1 per cent.

Defensive sectors like utilities outperformed growth sectors, underscoring the view that investors were concerned about the economic outlook.

McDonald's Corp advanced 31 per cent last year, making it the Dow's biggest gainer.

Reflecting the wild market swings, the CBOE Volatility Index, or VIX, rose about 32 per cent for the year, the first increase since 2008. The S&P 500 climbed 9 per cent at its peak, and dropped 14.5 per cent to its bottom.

Flat years

One potential silver lining headed into 2012 is that after relatively flat years, the market tends to bounce.

"The other times [the S&P 500] didn't change much during the year, it performed quite well during the next year," said Jason Goepfert, president of SentimenTrader.com in a report.

"Overall, the years after these small-change years did well, especially during the past 50 years."

Of those, the next year returned a median gain of 17.8 per cent, according to Goepfert's data. The maximum loss averaged a decline of only 1.6 per cent versus a maximum gain that averaged 20.9 per cent.

He also noted the final session of the year did not have a great run, being positive only 34 per cent of the time during the past 30 years.

On Friday, the Dow Jones industrial average fell 69.48 points, or 0.57 per cent, to 12,217.56 at the close. The Standard & Poor's 500 Index slipped 5.42 points, or 0.43 per cent, to 1,257.60. The Nasdaq Composite Index dropped 8.59 points, or 0.33 per cent, to 2,605.15. Daily volume last week hrang about half of the average, with many traders away for the Christmas and New Year's holidays. The anaemic action amplified moves in both directions.

Debt tensions

European shares closed up on Friday, but recorded their biggest annual drop in three years as debt tensions in the Eurozone strained the financial sector and threatened to derail a fragile economic recovery.

Some believe investors may have become too panic-stricken about Europe, an issue that will dominate headlines in coming months.

"Most of the Italian debt gets rolled over in the first quarter ... Once that debt's rolled, if it's rolled successfully, then there isn't any more to talk about this subject we've beaten to death for over a year now," said Ken Fisher, chief executive of Fisher Investments.