The Dow Jones Industrial Average in 2013? Yeah, that went well…

A steadily improving economy and no small amount of performance-enhancing stimulus from the Fed re-enthused equity investors in 2013, leading the Dow Jones Industrial Average to finish in record territory.

Let’s go to the tape:

  • Impressive Climb – The DJIA finished the year at 16,576.66, up 3,472.52 or 26.50%.  That performance leaves us with the latest in a series of record closes, the best annual percentage gain since 1995 and the largest annual point gain in history.
  • Leader & Laggard – Boeing (BA) was the standout contributor of the Dow, adding 444.47 points in 2013.  IBM subtracted 27.48 points to finish as the biggest detractor.
  • Industry Performance – All industries added to the DJIA’s advance in 2013 – Industrials led, followed by Financials and Consumer Services.
  • The Good – The biggest single day point gain – up 323.09 or +2.18% – was posted on October 10.  Despite finding themselves on Day 8 of the US government shutdown, investors were heartened by indications that House Republicans would offer a deal to raise the debt ceiling.
  • The Bad – The biggest single day point loss – down 353.87 or -2.34% – was June 20 when the market had an – ahem – adverse reaction to Bernanke’s comments about tapering of the Fed’s bond buying program.
  • Changes – There were three additions/deletions in 2013:  Hewlett Packard (HPQ), Alcoa (AA) and Bank of America (BAC) were removed after the close on September 20 and Goldman Sachs (GS), Visa (V) and Nike (NKE) were added for the opening of trading on September 23.
  • Dividends – All 33 stocks that were components in 2013 paid cash dividends, with nearly $124 billion paid.  Exxon paid out the most with nearly $11 billion distributed to shareholders.
  • Volatility – at 9.40, the DJIA’s realized annual volatility continued a downward trend from a peak of over 26 seen during 2009.
  • Potpourri – there were 52 record closes in 2013, the most since 1995; as of the close of 2013, the DJIA is up 153.19% from its financial crisis low of 6,547.05 hit on March 9, 2009; and, we experienced two major milestones in 2013 with the DJIA eclipsing both 15,000 and 16,000 about 6.5 months apart

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