Investors coasted on Thursday, leaving stocks unchanged while they looked ahead to Friday for a major jobs report. U.S. government bonds hardly moved, and neither did European stocks.

U.S. stocks rose slightly in the morning after the Labor Department said the four-week average of unemployment claims fell to 375,750, the lowest since June 2008 and enough to suggest a steadily improving job market.

The more important numbers come Friday, when the government releases the number of jobs created in January and the unemployment rate. In December, the country added 200,000 jobs, and the rate was 8.5 percent.

The Dow Jones industrial average traded in a narrow range all day, between a gain of 25 points and a loss of 40. It closed down 11.05 points at 12,705.41. In the 274 trading days since the beginning of 2011, the Dow has traded in a narrower range only 25 times.

The broader Standard & Poor’s 500 index rose 1.45, or 0.1 percent, to 1,325.54. The Nasdaq composite rose 11.41 points, or 0.4 percent, to 2,859.68.

Bond traders stayed on the sidelines, too. The price of the benchmark 10-year Treasury note rose 6.2 cents for every $100 invested, and the yield inched down to 1.82 percent from 1.83 percent Wednesday.

U.S. mining stocks rose after British mining company Xstrata PLC confirmed it is in merger discussions with commodities trader Glencore International PLC. In the U.S., Newmont Mining Corp. rose 1.9 percent, Alcoa was up 2.2 percent, and iron ore and coal miner Cliffs Natural Resources Inc. rose 0.3 percent.

The deal is a signal to investors that mining companies are trading at low prices compared with the commodities they mine, said Nathan Rowader, director of investments at Forward Management in San Francisco.

Health insurer Cigna dropped 3.4 percent after its earnings fell short of expectations as it absorbed higher corporate and medical costs. Pfizer fell 0.8 percent after recalling birth-control pills.

Retailers were a patchwork of rising and falling stocks, reflecting their patchwork of January sales results. Costco and Target came in better than expected. Macy’s and Dillard’s fell short. Costco rose 2.8 percent, and Target rose 1.1 percent.

Gap rose 10.7 percent after revenue at its high-end Banana Republic stores rose 6 percent.

Abercrombie & Fitch Co. fell 13.8 percent to a one-year low after it said higher markdowns and cotton costs mean its adjusted fourth-quarter profit and revenue will be less than analysts had expected.

Last year, investors were so worried about a financial disaster in Europe that U.S. companies with strong earnings have been undervalued, said Tim Courtney, chief investment officer of Burns Advisory Group in Oklahoma City.

Now, he said, stock prices are catching up. The S&P is up 5.4 percent this year, the Dow 4 percent.

“Right now the market is going up just on the absence of bad news, on the absence of that worst-case scenario materializing,” he said.

Stocks in Europe closed nearly flat or up slightly. Britain’s FTSE 100 index rose 0.1 percent. Germany’s DAX was 0.6 percent higher, and the CAC-40 in France rose 0.3 percent.

The euro was also subdued after recent gains, trading slightly lower at $1.315.

In other corporate news:

• Green Mountain Coffee Roasters Inc., which makes Keurig cup coffee brewers, rose a hot 24 percent after it said first-quarter revenue more than doubled, margins tripled, and net income rose more than 40-fold.

• MasterCard rose 6.7 percent after adjusted profits beat Wall Street expectations.

• Starwood Hotels & Resorts World Inc., which operates Sheraton and Westin hotels, fell 1.6 percent after it said its fourth-quarter profit dropped 51 percent because it set aside money for an unfavorable legal decision.

Natural gas prices climbed more than 7 percent after the government said the nation’s supplies shrank last week. Natural gas hit a 10-year low last month.

Benchmark crude oil fell $1.25 to end at $96.36 per barrel in New York because of weak demand.

Investors coasted Thursday while they waited for a critical government report on jobs. Stocks were mostly flat, a pause from their strong start this year, and bonds didn’t move much, either.

The Labor Department said the four-week average of unemployment claims fell to 375,750, the lowest since June 2008 and enough to suggest a steadily improving job market.

The more important numbers come Friday, when the government releases the number of jobs created in January and the unemployment rate. In December, the country added 200,000 jobs, and the rate was 8.5 percent.

A day ahead of the report, the Dow Jones industrial average was down 10 points at 12,707. The broader Standard & Poor’s 500 index rose one point to 1,325. The Nasdaq composite rose 10 points to 2,858.

The Dow traded in a narrow range — between a gain of 25 points and a loss of 40.

Bond traders stayed on the sidelines, too. The price of the benchmark 10-year Treasury note rose 6.2 cents for every $100 invested, and the yield inched down to 1.82 percent from 1.83 percent Wednesday.

Most industries in the stock market rose, albeit slightly. A 0.6 percent gain was all it took to make energy stocks the biggest-gaining category in the S&P.

U.S. mining stocks rose after British mining company Xstrata PLC confirmed it is in merger discussions with commodities trader Glencore International PLC. In the U.S., Newmont Mining Corp. rose 1.5 percent, Alcoa was up 2 percent, and iron ore and coal miner Cliffs Natural Resources Inc. rose 1 percent.

The deal is a signal to investors that mining companies are trading at low prices compared with the commodities they mine, said Nathan Rowader, director of investments at Forward Management in San Francisco.

Health care stocks fell almost 1 percent. Cigna dropped 4 percent after its earnings fell short of expectations as it absorbed higher corporate and medical costs. Pfizer fell 1.1 percent after recalling birth-control pills.

Retailers were a patchwork of rising and falling stock, reflecting their patchwork of January sales results. Costco and Target came in better than expected. Macy’s and Dillard’s fell short. Costco rose 2.5 percent, and Target rose 0.6 percent.

Gap rose 10 percent after revenue at its high-end Banana Republic stores rose 6 percent.

Abercrombie & Fitch Co. fell 11 percent to a one-year low after it said higher markdowns and cotton costs mean its adjusted fourth-quarter profit and revenue will be less than analysts had expected.

Last year, investors were so worried about a financial disaster in Europe that U.S. companies with strong earnings have been undervalued, said Tim Courtney, chief investment officer of Burns Advisory Group in Oklahoma City.

Now, he said, stock prices are catching up. The S&P is up 5.4 percent this year, the Dow 4 percent.

“Right now the market is going up just on the absence of bad news, on the absence of that worst-case scenario materializing,” he said.

Stocks in Europe closed nearly flat or up slightly. Britain’s FTSE 100 index rose 0.1 percent. Germany’s DAX was 0.6 percent higher, and the CAC-40 in France rose 0.3 percent.

The euro was also subdued after recent gains, trading slightly lower at $1.315.

In other corporate news:

• Green Mountain Coffee Roasters Inc., which makes Keurig cup coffee brewers, rose a hot 22 percent after it said first-quarter revenue more than doubled, margins tripled, and net income rose more than 40-fold.

• MasterCard rose almost 6 percent after adjusted profits beat Wall Street expectations.

NEW YORK (Reuters) – Stocks were little changed on Monday as recent earnings reports and development in the euro zone provided little incentive to disrupt the recent tone for equities on the heels of the best weekly performance by the S&P 500 in a month.

U.S. stocks are up nearly 5 percent for the year as an improving U.S. economy and earnings that have largely met expectations have boosted investor optimism. The Dow and S&P 500 both had their best weekly performances in a month last week.

According to Thomson Reuters data, 15 percent of S&P 500 companies have reported earnings, with 59 percent posting results above Wall Street expectations.

While the percentage of fourth-quarter earnings reports that beat estimates has trailed recent quarters, the rate is expected to improve as earnings season picks up steam. For the week of January 23, 117 S&P 500 companies are expected to report earnings.

"This is the momentum trade. The market got out of gates very strong this year," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.

"Earnings have been very cooperative in terms of keeping the tone positive. Macroeconomic data out of Washington has remained slightly better than expected, the employment numbers have helped. There are a lot of parts to this puzzle that are supporting a positive tone and a constructive internal character to the market."

The euro zone crisis was still lurking in the background. Germany and France pushed for a deal between Greece and its private creditors and said they remained dedicated to a new bailout that is needed by March to stave off a default. Euro zone finance ministers could decide later Monday what debt restructuring terms they would accept.

The Dow Jones industrial average (.DJI) was down 35.20 points, or 0.28 percent, at 12,685.28. The Standard & Poor's 500 Index (.SPX) dipped 2.61 points, or 0.20 percent, at 1,312.77. The Nasdaq Composite Index (.IXIC) was off 8.48 points, or 0.30 percent, at 2,778.22.

Halliburton Co (HAL.N) shares fell 3.2 percent to $35.03 after the world's second largest oilfield services group warned the deep slump in U.S. natural gas prices could cause near-term disruptions that pinch first-quarter earnings.

Research In Motion Ltd's (RIM.TO)(RIMM.O) fell 6.6 percent to $15.87 as analysts were skeptical about the resignation of the BlackBerry maker's co-chief executives.

Sears Holding Corp (SHLD.O) advanced 3 percent to $50.47, easing from a session high of $54.76 in what analysts said could be a short squeeze.

The stock is the most shorted stock in the S&P 500, according to Data Explorers, with 94 percent of shares available used to sell short. The retailer has been the best performing stock in the index for the year, up more than 50 percent.

"That is a classic short squeeze. There have been headlines all over the name now for the better part of a month or so and it's largely been quite negative," said Knight Capital's Kenny.

Chesapeake Energy Corp (CHK.N) gained 4 percent to $21.80 after it said it will reduce dry gas drilling and cut production in response to natural gas prices falling below "economically unattractive levels".

(Reporting By Chuck Mikolajczak; editing by Jeffrey Benkoe)

NEW YORK (Reuters) – The S&P 500 index was little changed on Wednesday as investors shrugged off warnings about further weakness in the euro from a lack of leadership in tackling the euro zone debt crisis.

U.S. stocks fell for most of the morning as the euro weakened against the U.S. dollar to its lowest in 16 months after Fitch Ratings warned of dire consequences if the European Central Bank did not take more action to support the currency.

But in a sign of the diminishing link between U.S. equities and the movement of the embattled currency, the S&P recovered most of the losses by afternoon trade.

"There has been a delinking of the U.S. and European markets that speaks to the fact the U.S. is not going into a recession and Europe probably is, though I think it will be mild," said Jeffrey Saut, chief investment strategist at Raymond James Financial in St. Petersburg, Florida.

"There's a flight to safety out of Europe and into our markets, and the world is greatly underinvested in U.S. stocks. That decoupling shovels even more money into the U.S," he said.

Analysts say U.S. stocks are undervalued compared to other markets, buoyed by a strong corporate sector and signs of a sustainable U.S. economic recovery.

The Dow Jones industrial average (.DJI) was down 31.45 points, or 0.25 percent, at 12,431.02. The Standard & Poor's 500 Index (.SPX) was down 1.05 points, or 0.08 percent, at 1,291.03. The Nasdaq Composite Index (.IXIC) was up 5.41 points, or 0.20 percent, at 2,707.91. The Dow and S&P 500 hit five-month highs on Tuesday.

Energy shares led equities lower as U.S. crude futures posted their fourth decline in five days. The S&P energy sector index (.GSPE) fell 1.3 percent and an index of oil services companies (.OSX) dropped 1.6 percent.

Further reflecting the weakening link between the euro zone and U.S. stock market, the 50-day correlation between the S&P 500 e-mini futures contract and the euro crossed the zero line this week after four months of being in positive territory, indicating they were no longer on the same path.

Supervalu Inc (SVU.N) shares dropped 12.2 percent to $7.37 after quarterly sales at the third-largest U.S. supermarket chain missed estimates.

Clothing retailer Urban Outfitters Inc (URBN.O), grappling with inventory and declining margins, said its chief executive resigned unexpectedly, sending the company's shares tumbling 16.7 percent to $24.52.

On the Nasdaq, Crocs (CROX.O) shares rose 15.2 percent to $18.38 after the shoemaker said it expects fourth-quarter revenue to be at the high end of its earlier estimate, becoming the latest footwear company to flag strong sales numbers for the holiday season.

(Reporting By Angela Moon; additional reporting by Rodrigo Campos in New York and Doris Frankel in Chicago; Editing by Kenneth Barry)

BANGKOK – Asian stock markets were mixed early Thursday, following flat trading on Wall Street as renewed worries over Europe’s banking system and a strong yen weighed on investor sentiment.

Japan’s Nikkei 225 index fell 0.5 percent to 8,514.03, while South Korea’s Kospi index gained 0.2 percent to 1,870.96. Hong Kong’s Hang Seng Index rose 0.3 percent to 18,787.21. Australia’s S&P ASX 200 fell 1.2 percent at 4,139.70.

Benchmarks in Singapore and Taiwan were higher while those in Malaysia and New Zealand were lower.

In Tokyo, the yen’s rise against the euro elicited fears of more pain ahead for Japanese exporters. The euro sank to 98.71 yen on Monday in European trading, which Japan’s Kyodo News said was an 11-year low. The euro remained under selling pressure as it hovered around 99.72 yen Thursday.

On Wednesday, European markets declined after another increase in Italy’s borrowing costs renewed worries about the continent’s efforts to restore confidence in its debt-hobbled governments. Additionally, UniCredit — Italy’s biggest bank — said it would offer stock at a 69 percent discount to raise cash. The size of the discount escalated worries about the state of Europe’s banking sector.

Stocks barely budged in the U.S. The Dow Jones industrial average edged up 0.2 percent to close at 12,418.42. The Dow opened the year Tuesday with a 180-point gain that brought it to its highest level since July.

The Standard & Poor’s 500 index inched up less than 0.1 percent to close at 1,277.30. The Nasdaq fell marginally to 2,648.36.

Benchmark oil for February delivery fell 35 cents to $102.87 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 26 cents to end at $103.22 per barrel on the Nymex on Wednesday.

In currencies, the euro fell to $1.2930 from $1.2938 late Wednesday in New York. The dollar slipped to 76.72 yen from 76.75 yen.

NEW YORK (Reuters) – Major U.S. stock indexes were little changed in a low-volume session on Wednesday, but some investors were encouraged to see equities avoid a sell-off amid lingering euro zone's debt problems.

Indexes held on to the previous day's large gains even as the euro dropped sharply against the dollar. Notably, U.S. banks held up well, even though bad news in Europe centered around the difficulties for some European lenders.

Tight credit markets are making it expensive for European banks to raise capital and for euro-zone countries to refinance debt. The latest sign of stress came from Italy's biggest bank, UniCredit, which fell nearly 10 percent after it offered to sell 7.5 billion euros ($9.8 billion) in shares at a steep discount to shore up its balance sheet.

A gauge of European bank shares dropped 1.6 percent, but in New York the KBW bank index added 0.34 percent.

"Some of what's been going on in the last weeks is the U.S. is starting to delink from Europe," said Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis.

"Not that we've totally isolated ourselves, but the fact you're seeing more days when the euro is off and the market here is up is evidence of some delinking," he said. "If the U.S. economy is growing again, it's much less vulnerable to external shocks."

Investors were encouraged by a sharp rise in new orders for U.S. factory goods in November, further evidence the economy is recovering.

The euro, which moved in lockstep with equities for most of the past quarter, slumped to its lowest level against the dollar in nearly a week.

The once-tight relationship between the S&P 500 and the euro continues to fray. The 50-day correlation coefficient between S&P e-mini futures and the single currency fell to 0.22, its lowest since mid-September. A perfect correlation score is 1; a score of 0 indicates no correlation.

The Dow Jones industrial average gained 21.04 points, or 0.17 percent, to 12,418.42. The S&P 500 Index edged up 0.24 point, or 0.02 percent, to 1,277.30. The Nasdaq Composite dipped 0.36 point, or 0.01 percent, to 2,648.36.

U.S. new vehicle sales released on Wednesday showed automakers ended the year with strong sales, but they forecast lower growth in 2012.

GM shares rose 0.5 percent to $21.15, while Ford added 1.5 percent to $11.30.

Netflix Inc, down more than 60 percent last year, led consumer stocks higher with a 11.4 percent rise to $80.45. The S&P consumer discretionary sector rose 0.7 percent.

Yahoo Inc shares fell 3.1 percent to $15.78 after it named PayPal president Scott Thompson as its chief executive, taking over on January 9 from interim CEO Tim Morse, who will resume his role as chief financial officer.

AT&T Inc agreed on Tuesday to pay TiVo Inc a minimum of $215 million and additional monthly licensing fees to settle a patent infringement dispute. AT&T shares gained 0.2 percent to $30.43, and TiVo jumped 10.1 percent to $9.82.

On the New York Stock Exchange 1,541 issues declined and 1,465 advanced, and on Nasdaq 1,521 declined and 963 advanced.

About 6.23 billion shares changed hands on the NYSE, Nasdaq and Amex, compared with last year's daily average of about 7.84 billion shares.

(Reporting by Rodrigo Campos; Editing by Padraic Cassidy)

Stocks indexes were little changed Wednesday following a big gain the day before. Gains by retailers offset a decline in banking and financial stocks. Most other sectors were flat.

The Dow Jones industrial average inched up 3 points to 12,400 as of 12:30 p.m. Trading was relatively subdued following a surge of nearly 180 points the day before, which brought the Dow to its highest level since July. The Dow started the day lower, losing as many as 60 points in mid-morning trading, then went back to breakeven shortly after noon.

The Standard & Poors 500 index was down less than a point at 1,276, while the Nasdaq fell 2 points to 2,646.

Phone equipment maker Acme Packet Inc. plunged almost 20 percent after saying its quarterly profit and revenue would be well below analyst expectations.

Yahoo Inc. fell 2 percent after it named Scott Thompson, president of eBay Inc.’s PayPal division, as its new CEO. Yahoo has been without a permanent CEO since firing Carol Bartz in September. The company’s board lost patience with her attempts to turn around the struggling Internet company during her 2 1/2 years on the job.

European markets fell after the euro weakened to $1.29 versus the dollar from $1.30 the day before. Another increase in Italy’s long-term borrowing rates renewed worries about Europe’s flailing efforts to restore investors’ confidence in the region’s governments.

Germany’s DAX fell 0.8 percent, while the CAC-40 in France fell 1.5 percent. The FTSE 100 index of leading British stocks was down 0.6 percent.

Retailers were among the few industries to rise after a trade group for malls said sales rose 5.3 percent in the last week of December because of strong after-Christmas shopping. Lowe’s Cos. rose 1.5 percent and Ross Stores Inc. rose 2.3 percent. However, Wal-Mart Stores Inc. fell 1.3 percent, making it the biggest decliner among the Dow’s 30 stocks. Analysts have been concerned that some retailers boosted holiday sales with deep discounts that will hurt profits.

Ford Motor Co. rose 2.4 percent after the auto maker said last year’s sales jumped 11 percent because of strong demand for trucks and SUVs. December sales rose 10 percent. Chrysler, owned by Italy’s Fiat, said sales rose 26 percent for the year and 37 percent in January. General Motors Co. said U.S. sales rose 13 percent last year. Analysts have been expecting December to be a strong sales month for the U.S. auto business as confidence in the economy unlocks pent-up demand.

Fallen photography pioneer Eastman Kodak Co. lost 2 cents to 64 cents after the company said its stock could be delisted from the New York Stock Exchange if it doesn’t rise above $1 in the next six months.

U.S. stocks opened the year with a bang on Tuesday. The Dow and S&P 500 each rose 1.5 percent after a measure of U.S. manufacturing expanded at the fastest rate in six months.

STOCKS FLAT: Despite a tumultuous ride, the S&P 500 index closed nearly unchanged for 2011. It ended at 1,257.60 Friday, just 0.04 point below where it started the year.

BEST OF THE BAD: U.S. stocks delivered little, but other markets did even worse, including ones in fast-growing economies. Brazil’s Bovespa index fell 18 percent in 2011. Hong Kong’s Hang Seng dropped 20 percent.

PLAYING IT SAFE PAYS: Stocks of one of the most conservative industries — utilities — rose 15 percent. That was the biggest gain for the S&P’s ten sectors. Consumer staples were up 11 percent.

NEW YORK – The stock market ended a tumultuous year right where it started.

In the final tally, despite big climbs and falls, unexpected blows and surprising triumphs, all the hullabaloo proved for naught. On Friday, the Standard & Poor’s 500 index closed at 1,257.60. That’s exactly 0.04 point below where it started the year.

“If you fell asleep January 1 and woke up today, you’d think nothing had happened,” says Jack Ablin, chief investment officer of Harris Private Bank. “But it’s been up and down all year. It’s been crazy.”

It was a year when U.S. companies were supposed to run out of ways to make big profits. But they didn’t, and in fact generated more than ever. It was a year when the U.S. lost its prized triple-A credit rating, which should have spooked buyers of its bonds. Instead investors bought more of them and made Treasurys one of the best bets of 2011. It was a year when stocks caught fire, then collapsed to near bear-market lows.

Among stocks, there were some surprising winners. Scaredy-cat investors who bought the most conservative and dullest of stocks — utilities — gained 15 percent this year, the biggest price rise of the ten industry sectors in the S&P 500. Other winning groups were consumer staples, up 11 percent, and health care companies, 10 percent.

Other market curiosities:

• Bad year, great quarter. Despite disappointing returns in 2011, the last three months of the year were impressive, which could bode well for the new year. The S&P 500 rose 11 percent. The Dow Jones industrial average, comprising 30 big stocks, climbed 1,344 points, or 12 percent. That was the largest quarterly point gain in its history. The Dow closed up 5.5 percent for the year.

• Best of the bad. U.S. stocks delivered little this year, but other markets did even worse, including ones in fast-growing economies. Brazil’s Bovespa index fell 18 percent in 2011. Hong Kong’s Hang Seng dropped 20 percent. In Europe, many of the biggest markets ended down in 2011. Britain’s FTSE 100 lost 5.6 percent, Germany’s DAX 14.7 percent.

• Buy American is back. A broad index of the Treasury market gained 9.6 percent, despite the fact that the U.S. government is now slightly less likely to repay its debt, at least according to Standard & Poor’s. In August, the rating agency stripped the U.S. of its triple-A rating, citing mounting U.S. debt and political squabbling over what to do about it.

For stock investors, 2011 wasn’t supposed to end this way.

At the start of the year, the Great Recession was officially 1 1/2 years behind us and the recovery was finally gaining momentum. The economy added an average of more than 200,000 jobs a month in February, March and April. And U.S. companies kept reporting big jumps in profits, defying naysayers.

The stock market roared in approval. On April 29, the S&P closed at 1,363, double its recessionary low of March 2009.

Then manufacturing slowed, companies stopped hiring and consumer confidence plummeted, taking with it those hopes of big stock gains for the year. Adding to the misery, Japan was rocked by an earthquake and tsunami. That shut down factories run by crucial parts suppliers to U.S. firms, in particular auto makers.

Gridlock in Washington didn’t help. After much squabbling, politicians eventually decided to raise the cap on how much the federal government can borrow in early August. But the heated debate took its toll. The Dow Jones industrial average swung more than 400 points four days in a row — down and up and down and up.

Overhanging it all was fear that the debt crisis in Greece had spread to Italy and Spain, countries too large for other European nations to bail out.

Talk of another blockbuster year for stocks turned to dark musings about the possibility of another U.S. recession. And so stocks kept falling. On Oct. 3, stocks had dropped 19 percent from their April high. That was just one point short of an official bear market.

Since then, U.S. housing starts have increased, factories are producing more, unemployment claims fell and U.S. economic growth rose. And companies are still generating impressive profits. Those in the S&P 500 have increased profits by double-digits percentages for nine quarters in a row.

The good news pushed stocks up in the closing months of the year.

The biggest winner in the Dow was McDonald’s Corp, up 31 percent for the year. Bank of America Corp. was the worst performing stock, down 58 percent.

Including dividends, the S&P 500 returned 2.11 percent for 2011. That means investors lost money after inflation, which was running at 3.4 percent in the 12 months ending in November. At least they’re getting more than investors in the benchmark 10-year Treasury note, which currently pays a yield of just 1.88 percent.

The outlook for stocks in the new year is either great or grim, depending on your focus.

Italy has to repay holders of $172 billion worth of it national bonds in the first three months of 2012. It will do so by selling new bonds. The question is how much interest they will demand to be paid to compensate for the risk they’re taking on. If they demand too much, fear could spread that the country will default. That could sink stocks.

After Italy was forced to pay unexpectedly high rates in a bond auction earlier this month, stocks fell hard around the world.

There are also questions about whether China’s economy is slowing too much and whether the U.S. politicians will agree to raise the debt ceiling again in 2012 or extend Bush-era tax cuts.

On the bright side, stocks seem to be well-priced.

The S&P 500 is trading at 12 times its expected earnings per share for 2012 versus a more typical 15 times. In other words, they appear cheaper now. Partly based on that many strategists, stock analysts and economists expect the index to end next year at 1,400 or more, up 10 percent or so.

The Standard & Poor’s 500 index rose 5.42 points, or 0.4 percent on Friday. The Dow Jones industrial average lost 69.48 points, or 0.6 percent, to 12,217.60. The Nasdaq composite index fell 8.59 points, or 0.3 percent, to 2,605.15 The Nasdaq is down 1.8 percent for the year.

Trading has been quiet this week with many investors away on vacation. Volume on the New York Stock Exchange has been about half of its daily average. Markets will be closed Monday in observance of New Year’s Day.

NEW YORK (Reuters) – For the U.S. stock market, 2011 was a long wild ride to nowhere.

The broad S&P 500 endured huge daily swings but a year of drama left the index almost where it started. It lost a mere 0.003 percent, closest to unchanged since 1947, according to Standard & Poor's.

Global markets have been battered this year by the euro-zone debt crisis, upheaval in the Middle East, and U.S. political gridlock. Similar events probably await investors in 2012.

"The earnings and fundamentals were there for companies, but the political crisis and paralysis in Washington and Europe were too much," said Martin Sass, who founded and runs the $7.5 billion M.D. Sass hedge fund.

"They overwhelmed the fundamentals. I didn't think the euro- zone crisis would have been so protracted as it has become."

The Dow industrials gained 5.5 percent for the year as investors sought safety in large-cap, dividend-paying stocks. The Nasdaq lost 1.8 percent.

Investors took out their ire on the financials (.GSPF), which were the weakest group this year, falling more than 18 percent. Concerns about exposure to Europe and the threat of a renewed financial crisis hurt those shares.

Bank of America Corp (BAC.N) was the Dow's worst performer, tumbling 58.3 percent this year, and it was also one of the S&P 500's biggest losers. JPMorgan Chase & Co (JPM.N) slumped 21.6 percent in 2011.

Cabot Oil & Gas Corp (COG.N) was the only S&P component to double its stock price in 2011 – rising 100.5 percent – followed by another energy name, El Paso Corp (EP.N), which rose 93.1 percent. The S&P 500 's weakest stock was First Solar (FSLR.O), as shares of that company were hit by falling solar panel prices. For the year, the stock was off 74.1 percent.

Defensive sectors like utilities outperformed growth sectors, underscoring the view that investors were concerned about the economic outlook.

McDonald's Corp (MCD.N) advanced 31 percent this year, making it the Dow's biggest gainer.

Reflecting the wild market swings, the CBOE Volatility Index, or VIX (.VIX), rose about 32 percent for the year, the first increase since 2008. The S&P 500 climbed 9 percent at its peak, and dropped 14.5 percent to its bottom.

One potential silver lining headed into 2012 is that after relatively flat years, the market tends to bounce.

"The other times (the S&P 500) didn't change much during the year, it performed quite well during the next year," said Jason Goepfert, president of SentimenTrader.com in a report.

"Overall, the years after these small-change years did well, especially during the past 50 years."

Of those, the next year returned a median gain of 17.8 percent, according to Goepfert's data. The maximum loss averaged

a decline of only 1.6 percent versus a maximum gain that averaged 20.9 percent. He also noted the final session of the year has not had a great run lately, being positive only 34 percent of the time during the past 30 years.

A DOWNBEAT FRIDAY

On Friday, the Dow Jones industrial average (.DJI) fell 69.48 points, or 0.57 percent, to 12,217.56 at the close. The Standard & Poor's 500 Index (.SPX) slipped 5.42 points, or 0.43 percent, to 1,257.60. The Nasdaq Composite Index (.IXIC) dropped 8.59 points, or 0.33 percent, to 2,605.15.

Daily volume this week has been running about half of the average, with many traders away for the Christmas and New Year's holidays. The anemic action amplified moves in both directions.

European shares closed up on Friday, but recorded their biggest annual drop in three years as debt tensions in the euro zone strained the financial sector and threatened to derail a fragile economic recovery. (.EU)

Some believe investors may have become too panic-stricken about Europe, an issue that will dominate headlines in coming months.

"Most of the Italian debt gets rolled over in the first quarter … Once that debt's rolled, if it's rolled successfully, then there isn't any more to talk about this subject we've beaten to death for over a year now," said Ken Fisher, chief executive of Fisher Investments.

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For a graphic on 2011 market performance, see:

http://r.reuters.com/xut75s

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Composite volume was 4.07 billion shares on the New York Stock Exchange, the Nasdaq and Amex, well below this year's daily average of about 7.84 billion shares.

Decliners led advancers on the New York Stock Exchange by about 4 to 3, while on the Nasdaq, about three stocks fell for every two that rose.

(Reporting By Angela Moon; Additional reporting by Daniel Bases in New York and Doris Frankel in Chicago; Editing by Jan Paschal)