The close: TSX ends tumultuous year with 1% decline

The Toronto stock market settled deep in the red Thursday, closing out what has been one of its more tumultuous years in recent memory.

The S&P/TSX composite finished off 132.3 points, or 1.01 per cent, at 13,009.95, marking the third consecutive day its been down since trading resumed Tuesday following the Christmas-Boxing Day holiday.

Nine of the index's 10 main groups ended in negative territory. Energy stocks were the lone to rise as crude oil prices unwound earlier losses.

That left Canada's main index down 1,623.19 points — or a loss of some 11 per cent — from its close of 14,632.44 exactly a year ago.

"From an investment standpoint it was a year of avoiding Canada," said Cavan Yie, equity analyst of investments at Manulife Asset Management.

The Canadian dollar rose on Thursday against its U.S. counterpart as crude oil prices rallied, ending a year in which it weakened by 16 per cent and delivered its worst performance since the global financial crisis of 2008.

Corporate buying interest added to support for the currency in thin markets, according to Don Mikolich, executive director, foreign exchange sales at CIBC Capital Markets.

Foreign exchange desks were expected to close early ahead of the New Year's Day holiday, while the Bank of Canada also posted its official closing rate early.

The loonie fell 16 per cent to touch an 11-year low in 2015, pressured by deep losses for crude oil prices and two rate cuts from the Bank of Canada, while the U.S. Federal Reserve hiked rates for the first time in more than nine years.

The Canadian dollar closed at $1.3840 to the greenback, or 72.25 U.S. cents, stronger than Wednesday's close of $1.3885, or 72.02 U.S. cents.

The currency's strongest level of the session was $1.3824, while its weakest level was $1.3903. It had hit its weakest level in more than 11 years on Dec. 18 at $1.4003.

On Thursday, the financial sector stocks provided one of the biggest drag amid broad-based losses ahead of the New Year's Day holiday on Friday. The overall financial services sector fell 1.4 per cent.

Bank of Nova Scotia was down 1.81 per cent, while Royal Bank of Canada fell 1.91 per cent.

Consumer staples stocks were the biggest decliner, falling 2.2 per cent. Alimentation Couche-Tard was down 1.74 per cent, while Cott Corp. declined 2.5 per cent.

In New York, the Standard & Poor's 500 Index lost its grip on a fourth consecutive annual gain in the year's final trading session, as technology shares led a decline in U.S. stocks paced by Apple Inc.Apple fell for the fourth time in five days to extend its 2015 retreat to 4.6 per cent, its worst since 2008. The year's last day featured seesaw moves as energy producers in the benchmark index advanced with oil after erasing an early drop, though the group capped its biggest annual retreat in seven years.

The S&P 500 slumped 1 percent to 2,043.76, with gauge falling 0.7 per cent for the year as selling accelerated in the final minutes of trading.

The Dow Jones industrial average was down 181.51 points, or 1.03 per cent, to 17,422.36, while the Nasdaq Composite had dropped 58.44 points, or 1.15 per cent, to 5,007.41.

"This is the most poetic way you could end the year," said Jeff Clark, an analyst at Stansberry & Associates in San Francisco. "The market has basically done nothing. We've had some attempts to rally and some attempts to drop, but it's been a pretty frustrating year for trading. The momentum is in the bearish camp right now."

Equities bucked the historical trend of gains in December. Amid a series of sharp selloffs and rallies focused around the Federal Reserve's interest-rate boost, the S&P 500 fell 1.8 per cent this month, its worst December drop since 2002. Energy companies lost 10 per cent this month to cap their worst year since 2008.

The market's torpor is likely to be broken next week as investors will return from the holiday to a swath of data, including gauges on the manufacturing and services industries, the monthly jobs report and minutes from the Fed meeting that ended with the first rate increase since 2006.

While policy makers have forecast a gradual pace for future rate increases, they also stressed a dependence on the progress in economic data. A report today showed the number of Americans filing applications for unemployment benefits rose more than projected during the Christmas week, reaching the highest level in almost six months, perhaps reflecting typical swings during holidays.

In the absence of the so-called Santa rally in December, the S&P 500 struggled to hold its gain this year, up only 0.2 per cent heading into the final day. The measure rose as much as 3.5 per cent in 2015, and fell 9.3 per cent at its low in August amid its first correction in four years, sparked by worries about weakness in China.

Investor sentiment this year has wavered between optimism that the improving labor market was boosting the economy enough to handle higher borrowing costs, to concern that a slowdown in China would damp global growth. Weakness in the world's second- largest economy has weighed on commodity prices, dragging down energy and raw-material shares and putting a blight on U.S. corporate profits.

Oil prices rose on Thursday but fell as much as 35 per cent for the year after a race to pump by Middle East crude producers and U.S. shale oil drillers created an unprecedented global glut that may take through 2016 to clear.

Global oil benchmark Brent and U.S. crude's West Texas Intermediate (WTI) futures rose between 1 and 2 per cent on the day on short-covering and buying support in a thinly traded market ahead of the New Year holiday.

But for 2015, both benchmarks fell double-digits for a second straight year as Saudi Arabia and other members of the once-powerful Organization of the Petroleum Exporting Countries (OPEC) again failed to boost oil prices.

The U.S. shale industry, meanwhile, surprised the world again with its ability to survive rock-bottom crude prices, churning out more supply than expected, even as the sell-off in oil slashed by two-thirds the number of drilling rigs in the country from a year ago.

The United States also took a historic move in repealing a 40-year ban on U.S. crude exports to countries outside Canada, acknowledging the industry's growth.

"You do have to tip your hat to the U.S. shale industry and their ongoing ability to drive down costs and hang in there, albeit by their fingernails," said John Kilduff, a partner at Again Capital, an energy hedge fund in New York.

Brent crude settled up 82 cents at $37.28 a barrel, rebounding from a near 11-year low of $36.10 hit earlier in the session. For the month, it was down 16 percent and for the year, it fell 35 per cent. In 2014, Brent lost 48 per cent.

WTI rose 44 cents to $37.04 a barrel. It slid 11 per cent in December and 30 per cent for the year, after a 46-per-cent loss in 2014.

The immediate outlook for oil prices remains bleak. Goldman Sachs has said prices as low as $20 per barrel might be necessary to push enough production out of business and allow a rebalancing of the market.

With files from Reuters and Bloomberg News