Getting the bull rolling

NEW YORK -- The bulls returned with a flourish to Wall Street in 2003 as the Nasdaq, Dow Jones and Standard & Poor indexes all ended the year higher -- the market's first winning year since 1999.

Investors -- both private and corporate -- hoped for more good news in 2004 following the too-recent grueling bear market that wiped out billions of dollars from investors' portfolios.

For the year, the Dow Jones industrials closed up 25.3 percent, the Nasdaq surged 50 percent, and the Standard & Poor's 500 gained 26.4 percent.

The market was mixed in light trading Wednesday, with the Dow and S&P posting small gains and the Nasdaq slightly pulling back. The markets were closed Thursday.

The three main gauges had their best annual performance in years, with the Dow notching its strongest gain since 1996 and the S&P seeing its best since 1998. The Nasdaq had its third-best performance ever, behind a 57 percent rise in 1991 and an 86 percent gain in 1999.

The Dow finished the year at 10,453.82, its highest level since March 21, 2002. The Nasdaq closed at 2,003.37, while the S&P ended 2003 at 1,111.92.

Stocks gained in recent weeks on investor optimism for strong earnings growth in 2004. But with the main gauges trading at their highest levels in nearly two years, analysts say stock prices might be getting a bit high.

Sharp contrast

"It should be encouraging that folks aren't heading for the doors in terms of a lot of selling pressure," Caldwell said. "That was one of our concerns going into the end of the year. But what happens in January remains to be seen."

It is a sharp contrast from one year ago. Investors began 2003 with trepidation, stung by three years of bitter declines after the bursting of the tech bubble in early 2000 and uncertain about the economy as the United States headed toward a war with Iraq.

But war jitters had little effect on the overall market, and tax cuts and yet another interest rate cut added to a strong rally that lifted the Dow above 10,000 for the first time since May 2002 and the Nasdaq above 2,000, last seen in January 2002.

"Investors were really surprised that the economy has seen as much growth as it has," Caldwell said. "With the S&P up more than 20 percent, ... it gets us back to the heady days of the late 1990s."

"On the one hand, it's great, but on the other hand, it makes me a little bit nervous," he said.