U.S. Equity Market Ended the Year Unchanged

The U.S. stock market just ended the year almost unchanged. On the final trading day, Friday, Dec. 30, 2011, the Standard & Poor’s 500-stock index closed at 1,257.60 with a 0.4 percent loss for the day. The S&P 500, a benchmark index for the U.S. broad equity market, statistically unchanged for the year, from 1,257.64 on Dec. 31, 2010 to 1,257.60 on Dec. 30, 2011, which is just 4 ticks difference or  a decline of 0.003% for the year.

Meanwhile the Dow Jones industrial average fell 0.6 percent on the final day and was up 5.5 percent for the year, closing at 12,217.56.

U.S Economic Indicators 3Q 2011

The U.S. economy grew more slowly in the summer than previously thought because consumers spent less than the government had first estimated. The Commerce Department says the economy grew at an annual rate of 1.8 percent in the July-September quarter. That was the fastest growth this year, up from 1.3 percent in the April-June quarter. But it was down slightly from last month's estimate that the economy was expanding at a 2 percent rate in the summer.

But economists expect growth in the current October-December quarter to be stronger. They think the economy is growing at an annual rate of more than 3 percent in the final three months of this year. That would be the fastest pace since a 3.8 percent performance in the spring of 2010.

Credit is Easing: Loans Rose 10% in Q3

U.S. bank credit is growing at the fastest pace in three years, giving the Fed confidence in the economic expansion’s staying power.

Until the second quarter, the banks had been more interested in shoring up their balance sheets than lending since the start of the financial crisis. Banks raised their levels of equity capital after the U.S. Federal Reserve 2009 stress tests revealed weakness in their assets because of the housing slump and the deepest recession since the 1930s.

In the third quarter financial institutions increased commercial and industrial loans by an average annual pace of almost 10 percent, the highest since the comparable quarter in 2008, according to Fed data. The latest numbers show seasonally adjusted loan growth of 15 percent in October and 6.1 percent in November.