For investors, 2010 was a 12-month tug of war between optimism and doubt. Stocks initially strengthened, the job market didn't, and fears of economic collapse in Europe and a chilling "flash crash" left many investors almost too stunned to act.
The year ended with stock markets at their highest level since the 2008 financial crisis on signs of an improving economy. But those same signs are producing worrisome side effects: Interest rates are on the rise, gold now tops $1,400 an ounce and oil prices, poised to exceed $100 a barrel, could send pump prices to $4 a gallon.
None of that seemed possible in the spring when many investors became convinced that the economy would fall back into recession. Then starting in summer, the mood shifted.
Government reports started to show the economy was gaining some strength. Corporate profits surged. And Federal Reserve Chairman Ben Bernanke signaled that the central bank was prepared to pump hundreds of billions of dollars into the economy to stimulate demand.
By the close of trading Friday, double-dip recession fears seemed like distant memories. The Standard & Poor's 500's 15.1 percent gain for the year, after dividends, was 53 percent more than its average historical gain.
Whether the gains will continue into 2011 will depend in part on how quickly the unemployment rate, now at 9.8 percent, drops. That will, in turn, be driven by how likely consumers are to increase their spending and how likely corporations are to spend the more than $1 trillion in cash on their balance sheets.
Many on Wall Street are optimistic that the bull market won't end in 2011. "All of the economic indicators are pointing to stronger growth next year," said Peter Cardillo, chief market economist at New York-based brokerage firm Avalon Partners Inc.
Trading on Friday was quiet and marked by some of the lowest trading volume of the year. The Dow Jones Industrial average rose 7.8 points to 11,577.5. The S&P 500 fell less than a point to 1,257.64. The Nasdaq composite fell 10.1 to 2,652.87.
For the year, each index returned double-digit gains. Over the course of 2010:
The Dow gained 1,149.46 points, or 11 percent. With dividends, its total return rose to 13.99 percent.
The S&P 500 index gained 142.54 points, or 12.8 percent. Including dividends, its total return came to 15.1 percent.
And the Nasdaq index gained 383.72, or 16.9 percent, to close at 2,652.87. After dividends, its total return came to 18 percent.
In other markets:
Oil prices ended the year above $91 a barrel after surging 34 percent since May as demand increased from China and other emerging markets. That could push gasoline prices to $4 a gallon by summer in some parts of the country, experts say.
Gold topped $1,420 an ounce, up 31 percent for the year. Grains and soybean prices also ended the year sharply higher. The reason: China's seemingly insatiable demand for raw materials and speculators betting that they could profitably ride the momentum higher.
The yield on the 10-year Treasury note ended the year at 3.29 percent. That's low by historical standards, but up from an early October low of 2.38 percent that helped push mortgage rates to 50-year lows. Now mortgage rates are rising again.
Economists are predicting the dollar will fare better in the new year after it fell against the euro and the Japanese yen in 2010.
For stock investors, the numbers mask the fact that it was a rocky year. The Dow reached 11,205 and the S&P 500 reached 1,217 in late April, then took a thrill ride downward after it became clear that Greece required an emergency bailout to deal with its debt crisis and fears of a double-dip U.S. recession grew.
Then came what came to be known as the "flash crash" on May 6. The Dow, already down about 400 points on worries about Europe, dropped 600 points in seven minutes. It rebounded 700, then fluctuated before closing with a loss of 347. The sudden drop was later attributed to a fund company that used a complex computer trading program. It had a profound effect on individual investors.
"The flash crash made retail investors take a step back and say, 'Is this really just a legalized gambling arena?"', said Scott Rostan, a financial consultant for investment banks and an adjunct professor at the University of North Carolina, Chapel Hill.
Stocks stayed in a funk through the early summer as economic reports kept pointing to an uncertain recovery, and as the battered housing market was hit again, this time by the end of tax credits for homebuyers. By July 2, the Dow bottomed out at 9,686.48.
Shipping company UPS and construction equipment maker Caterpillar - viewed as two bellwether indicators for the economy - both said they saw signs of improvement.
Then just days after Bernanke promised to flood the economy with dollars, investors got unexpectedly good news on Sept. 1 about manufacturing in the U.S. and China.
"It was a market that needed stimulus and responded miraculously," said Quincy Krosby, the chief market strategist at Prudential.
The Dow rose almost 16 percent through the end of the year as investors grew more optimistic about the economy. Signs of stronger consumer spending - including a solid holiday shopping season - also helped.
By the end of December, investors began moving money back into U.S. stock funds after selling for every week since May.
That earlier pessimism helped other types of investments, including bonds and gold, flourish.
The yield on the 10-year Treasury note, which moves opposite its price, rose to a yearly high of just under 4 percent in April and then plunged in October as investors kept buying the safety of U.S. government debt. That contributed to a historic drop in mortgage rates that brought 30-year fixed-rate loans to a low of 4.17 percent early in November.
A distrust of the stock market also helped fuel a boom in commodities, which finished 2010 at their highest levels in years. Gold closed above $1,400 an ounce after rising throughout the year on global economic worries. Oil prices rose from a low of $70 a barrel to close the year higher than $90.