Stocks gain on '08's last day

NEW YORK (CNNMoney.com) -- Wall Street gained Wednesday morning, the last day of 2008, as investors welcomed a report showing a drop in weekly jobless claims and scooped up shares hit in the year's stock battering.

The Dow Jones industrial average (INDU), the Standard & Poor's 500 (SPX) index and the Nasdaq composite (COMP) all gained in the early going.

This has been one of Wall Street's worst years on record. As of Tuesday's close, the Dow is down 34.7%, the S&P 500 is down 39% and the Nasdaq down 41.5%. Yearly losses of this size haven't been seen since the 1930s.

Analysts are cautiously optimistic that 2009 will bring some improvement, although the volatility isn't expected to lessen. (For details, click here.)

Jobless claims: The Labor Department reported that initial jobless claims totaled 492,000 in the week ended Dec. 27. Economists surveyed by Briefing.com had expected, on average, a total of 575,000. The tally was down from the 26-year high of 586,000 filed the prior week.

Markets: Stock activity overseas was limited. In Asia, major indexes ended mostly higher in the final day of trading for 2008; Tokyo was closed for a holiday that runs the rest of the week. Stocks in Paris and London gained at the start of half-day sessions; there was no trading in Frankfurt.

"I expect a very light trading day," said Peter Cardillo, analyst for Avalon Partners. "Traders just can't wait for the bell to ring at 4 o'clock and say 'good bye' to this trading year."

U.S. stock markets are open for a full day of trading Wednesday but are closed Thursday for New Year's Day.

"There's no question that we can say good riddance to 2008," said Cardillo. "It was a horrible year in every sense of the word."

"No matter what happens, I think we're going to drift higher," said Dave Rovelli, managing director for Canaccord Adams, referring to the stock market. "I think all the selling is done for the year."

Rovelli said the markets in 2009 will experience some positive momentum going into Barack Obama's inauguration as president on Jan. 20, as investors focus on his stimulus plan.

"The only problem with that, is that [fourth-quarter] earnings are going to be so bad later in January," said Rovelli.

Oil and money: Also due Wednesday, after the markets open, is the weekly report on oil inventories from the Energy Department.

Oil fell 81 cents to $38.22 a barrel on the New York Mercantile Exchange.

Weak reports from Tuesday about the job, housing and consumer markets pushed oil prices down. This countered the impact of the biggest-ever production cut from the Organization of Petroleum Exporting Countries, as well as concerns over unrest in Israel and Gaza.

The dollar edged up versus the euro and the yen.