Stocks end December, year sharply lower, despite day's gains

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U.S. stocks closed higher Monday, the final day of trading in 2018, but wrapped up a volatile year and month lower as a number of worries weighed on investor sentiment.

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The 30-stock Dow Jones Industrial Average and the broader S&P 500 both ended the year about 7 percent lower, while the tech-heavy Nasdaq Composite closed out 2018 about 4 percent down – its biggest one-year decline since 2008.

While shares of investment bank Goldman Sachs, IBM and Caterpillar rose Monday, for the year they are off approximately 35 percent, 26 percent, and 19 percent, respectively.

TickerSecurityLastChange%Chg
GSGOLDMAN SACHS GROUP INC.197.43-1.71-0.86%
IBMINTERNATIONAL BUSINESS MACHINES CORP.134.32-1.56-1.15%
CATCATERPILLAR INC.122.76-3.85-3.04%

For the month the three averages are all down about 10 percent for their worst December since 1931.

The declines reflected investor worries about the effect of a prolonged trade war between the U.S. and China, prospects for global economic weakness and the likelihood of higher interest rates.

Despite the worries, shares over the last five trading days rose about 4 percent.

The yield on the 10-year Treasury fell 1.82 percent to 2.68. Yields on government debt have declined for two months as volatility and equity losses have driven investors into securities perceived as safer.

For the same reason gold settled at nearly a six-month high of $1,284.40.

Crude oil prices ended Monday up about 1 percent at $45.82 but down approximately 25 percent for the year.

TickerSecurityLastChange%Chg
I:DJIDOW JONES AVERAGES25764-98.68-0.38%
SP500S&P 5002859.53-16.79-0.58%
I:COMPNASDAQ COMPOSITE INDEX7816.284652-81.76-1.04%

Equities on Monday rose on fresh optimism about a resolution to the U.S.-China trade conflict.

Presidents Trump and Xi Jinping talked over the phone on Sunday, and expressed willingness to strike a trade deal afterwards. Trump said "big progress" was being made on a potential trade deal.

Earlier this month, the two nations agreed on a 90-day ceasefire in the trade war that will begin Tuesday.

A spokesperson for China’s foreign ministry offered an upbeat statement about prospects for successful negotiations, according to government media outlet Xinhua News Agency.

"China stands ready to work with the United States to move forward the China-U.S. ties which are underpinned by coordination, cooperation and stability,” the spokesperson said.

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In Asian markets on Monday, Hong Kong shares climbed over 1 percent, closing an otherwise bearish 2018 on a firm note.

In a shortened trading session, the Hang Seng index rose 1.3 percent, but lost 13.6 percent of its value for the year, the worst decline since 2011.

Trading for the year in China and Japan ended on Friday. China’s Shanghai Composite lost 24.6 percent for the year.

Japan’s Nikkei declined 12 percent for the year. It was the Nikkei’s first annual decline since 2011.

In Europe, London’s FTSE traded higher by 0.3 percent and France’s CAC rose 1 percent. Germany’s DAX was closed, having ended the trading year on Friday losing 18-percent for the year.

FOX Business' Ken Martin contributed to this story.