Chinese Stocks & Dollar Were Stars, Oil Big Loser
China and the United States headed the list of 2014 top-performing equity markets among larger economies while markets elsewhere ended the year on a wary note as another sharp drop in oil and worries about Greece's future drove profit-taking.
The U.S. dollar on Wednesday added slightly to gains that have made it the year's star major currency. Some European bond yields added to a string of all-time lows following a surprisingly sharp fall in Spanish inflation on Tuesday.
European stocks wrapped up the year 4 percent higher overall, though there were some striking exceptions, such as near-30 percent losses for debt-strained Greece and Portugal.
On Wall Street, stocks were modestly higher on Wednesday and the S&P 500 was on track to end 2014 near its record high. The index hit records in more than 50 sessions throughout the year.
"Markets put in a solid year in spite of significant headwinds that could have easily derailed a multi-year bull market," said Peter Kenny, chief market strategist at Clearpool Group in New York. "The most the bears got out of this year was a 10 percent correction on an intraday basis, and the markets stubbornly moved higher, and for good foundational reasons."
The S&P 500 is on track to end its third straight year of double-digit gains. On a total return basis, the benchmark is up 14.9 percent this year.
The Dow Jones industrial average has gained 8.1 percent, and the Nasdaq Composite is up 14 percent for the year.
At 2:18 p.m. (1918 GMT) the Dow Jones industrial average fell 62.94 points, or 0.35 percent, to 17,920.13, the S&P 500 lost 10.42 points, or 0.5 percent, to 2,069.93, and the Nasdaq Composite dropped 16.33 points, or 0.34 percent, to 4,761.11.
In Latin America, Argentina's benchmark stock index added 59 percent in 2014 and Brazil's Bovespa shed nearly 3 percent. Colombia's IGBC fell 11 percent and Mexico's IPC was little changed, up less than 1 percent.
The stand-out equity performer among top economies this year was China, where the CSI300 index ended 2014 with gains of 52 percent. The index added more than 25 percent in December alone, its best month since April 2007, in part as foreigners won wider access to Chinese stocks.
"China stocks have done really well this year and the dollar move has also been very interesting," said Alvin Tan, an FX strategist at Societe Generale in London. "It barely moved against the other major currencies in the first (half) of the year and all the big gains came in the second."
The dollar was on track to end 2014 up more than 12 percent against a basket of major currencies, its best performance since at least 2005. An expected start to a Federal Reserve tightening cycle may strengthen the dollar's appeal in the new year.
With a slight gain on Wednesday, the dollar index was on track to finish above the 90 level for the first time since 2005.
The euro, undermined by bets that the European Central Bank will have to start buying government bonds to avert deflation, was down 0.5 percent at $1.2098, having touched a 2-1/2-year low of $1.2096.
The Russian rouble was down 5 percent on the day as a 77 percent plunge for the year marked its worst performance since Russia defaulted in 1998.
The young bitcoin currency is closing the year only slightly better than the rouble, falling 57 percent at about $317. It peaked at $995 last January.
U.S. government debt that matures in 20 years and beyond is on track to book a 27 percent return, according to Barclays. That would be its biggest annual gain since 2011, when it generated a 33 percent return.
On its last session of the year, the benchmark 10-year U.S. Treasury note was up 6/32, the yield at 2.1703 percent.
Crude oil prices , already down by half from this year's peak, slumped again on Wednesday. Brent fell as much as 3.7 percent to trade below $56 a barrel and U.S. crude was down 3 percent at its session low. Weak Chinese manufacturing data and demand concerns weighed on prices.
Brent was last down 2 percent at $56.72 a barrel and WTI fell 2.6 percent to $52.74 a barrel. For the year Brent is down 49 percent and WTI is down 46 percent.
Copper, of which China is the biggest consumer, looked set to post its biggest annual decline in three years at 14.4 percent, while traditional safe-haven gold was set to close the year just shy of 2 percent lower. Silver fell nearly 20 percent in 2014 after a more than 35 percent drop in 2013. (Additional reporting by global financial markets teams; Editing by Dan Grebler and Leslie Adler)