U.S. stocks closed lower Friday, the last trading day of the year, with no S&P 500 sectors ending higher.
The S&P 500 closed about half a percent lower but still held gains of 19.4 percent for the year, its best since 2013. Information technology soared 36.9 percent and materials gained 21.4 percent as the top performers for 2017, while energy and telecommunications were the only sectors in the red for the year.
Selling suddenly accelerated in the last several minutes heading into Friday's close. Traders said there was no apparent reason for the broad sell-off, which hit all three major indexes. It took several minutes for stocks to settle before the Dow Jones industrial average finally ended about 118 points lower, erasing gains for the week.
Stocks were "hit very late in the day across different sectors," said Sahak Manuelian, managing director at Wedbush Securities. "I imagine it was just guys selling … reducing exposure on some the bigger winners of the year."
U.S. composite trading volume for the session was more than 1 billion shares below its 50-day average. Trading volume has been light all week as U.S. markets were closed Monday for Christmas and are closed next Monday for New Year's Day.
Apple and UnitedHealth each fell more than 1 percent as the greatest negative impact on the Dow, followed by Goldman Sachs. UnitedHealth is the third-best performer in the Dow this year. Boeing is first, followed by Caterpillar.
Goldman Sachs shares closed 0.68 percent lower after earlier falling more than 1 percent. The company disclosed in a Friday filing with the U.S. Securities and Exchange Commission that the financial giant expects fourth-quarter earnings to decrease by about $5 billion, primarily due to repatriation provisions in the new U.S. tax law President Donald Trump signed last Friday.
The law requires companies to repatriate, or bring back, foreign earnings, beginning in 2018, with the option of paying taxes on those earnings over eight years. The special, one-time tax rate is 8 percent for illiquid assets and 15.5 percent for cash.
The new law also cuts the corporate tax rate to 21 percent from 35 percent.
"It will be interesting to see how much short-term capital gains there will be in the first few weeks of January," said Dan Deming, managing director at KKM Financial. In addition, "People will be rebalancing their portfolios."
Stocks have soared in anticipation of the stimulative effects of the tax cut. The Dow and S&P 500 posted five straight weeks of gains last week after Trump signed the new tax legislation, which he was able to do after Congress approved another bill to keep the federal government funded through Jan. 19.
"The question next year is how much of that stimulus will flow to the companies' bottom line," said Jeremy Klein, chief market strategist at FBN Securities. "Did what we assume was going to happen for companies really happen?"
"I think a lot of things change on Jan. 2," he said.
A creep higher in commodities prices could also change expectations next year on inflation.
Gold futures expiring in February settled up 0.93 percent at $1,309.30 after hitting their highest since Sept. 26. The precious metal futures gained 13.68 percent for the year, their best since 2010.
U.S. crude oil futures closed above $60 for first time in 2.5 years, settling at $60.42 for a gain of 12.5 percent for the year.
Copper settled 0.2 percent lower after rising for 15 straight sessions to a near four-year high Thursday. Copper gained 31.7 percent this year, its best since 2010.
"You've got certain beliefs in the right environment moving forward that could impact the reset on a lot of equity positions," Deming said, noting the weakness in the U.S. dollar is likely causing confusion.
The U.S. dollar index fell Friday to its lowest since late September, down more than 9.5 percent this year in its worst year since 2003. The euro climbed to $1.20, its highest since Sept. 22.
Even with Friday's sudden, late-session decline, 2017 was notable for the lack of market volatility. The S&P only moved up or down by at least 1 percent on eight occasions this year, most recently on Sept. 11. The index had 48 such days in 2016 and 71 in 2015.
For all of 2017, trading volume in SPDR S&P 500 (SPY) shares was on pace for its lowest volume year since 2006.
Stocks failed to set records Friday, but the S&P and Dow ended the year within 1 percent of their all-time highs hit this month. The Nasdaq composite was within 1.5 percent of its record high hit Dec. 18.
The Dow did close at a record Thursday for the 71st time this year and was on pace for slight weekly gains. The last time the Dow rose in each of the final six full weeks of the year was in 1954. That does not include weeks encompassing two different years.
On a monthly basis, the indexes did make history:
- The Nasdaq composite rose 0.4 percent in December, meaning it posted gains in 11 of 12 months in 2017, a first for the tech-heavy index.
- The Dow rose 1.8 percent for the month, its first nine straight months of gains since 1959.
- The S&P gained 0.98 percent for its first nine-month win streak since 1983.
On a total return basis, which includes dividends, the S&P 500 is on pace to post gains for every month of the calendar year for the first time in history, according to Ryan Detrick, senior market strategist at LPL Financial.
Top three S&P 500 performers
Three worst performers in the S&P 500