Nasdaq's Two-Year Gain: 63%

Updated from 4:14 p.m. EST

Stocks swerved to minor losses Friday, pushed lower in the final hour as traders locked in last-minute profits. Still, it was a second straight winning year in the stock market, with all three major averages finishing in the green.

On the last day of 2004, the Dow Jones Industrial Average lost 17.29 points, or 0.16%, to 10,783.01. The S&P dropped 1.63 points, or 0.13%, to 1211.92. The Nasdaq Composite lost 2.90 points, or 0.13%, to 2175.44. The 10-year Treasury note gained 9/32 to yield 4.22%.

Volume was thin ahead of New Year's, with 787 million shares trading on the NYSE and 1.4 billion changing hands on the Nasdaq. Advancers led decliners by roughly 6 to 5 on both venues.

For all of 2004, the Dow gained 3.1%, the Nasdaq added 8.6% and the S&P 500 rose 9.0%, each saved by a strong fourth quarter. Over the last two years, the Dow is up 29.3%, the Nasdaq is up 62.8% and the S&P 500 is up 37.6%. Over the last five years, however, the Dow is down 8.7%, the Nasdaq is down 47% and the S&P 500 is down 17.5%.

For the fourth quarter, the gains were 7 on the Dow, 14.7% on the Nasdaq and 8.7% on the S&P.

Oil futures closed for the year Thursday ahead of the holiday at $43.45.

"Despite the fact that the rally has struggled for the last week to move higher, there's very little sign of weakness in the market," said Ken Tower, chief market strategist with CyberTrader. "The uptrend should accelerate once we get into the new year next Monday. It's time for investors to make their New Year's resolution."

The Dow's gain for 2004 trailed the other indices due to weakness in components like Merck(MRK Quote), Pfizer(PFE Quote), American International(AIG Quote) and Coca-Cola(KO Quote).

Among those, Pfizer dipped further Friday even after its Lyrica drug was approved by the FDA for the treatment of pain associated with conditions like diabetes and shingles. The treatment remains under review for epilepsy. Pfizer fell 12 cents, or 0.4%, to $26.89.

Elsewhere, HealthSouth(HLSH Quote) said it will pay $325 million to settle federal charges that it overbilled Medicare. The company, which collapsed two years ago in one of the major post-Enron corporate blowups, will make a $75 million initial payment and return the rest through quarterly installments over three years. The company's former CEO, Richard Scrushy, faces trial on fraud charges starting next month. HealthSouth lost 2 cents, or 0.3%, to $6.28.

Flight attendants at bankrupt carrier United Airlines authorized a strike Thursday in the event a bankruptcy court terminates their contract. The UAL(UALAQ Quote) unit had previously asked the court to cancel contracts with unions that don't come to terms on contracts. UAL dropped 7 cents, or 5.4%, to $1.30.

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