NEW YORK (CNN/Money) - It's official: the bear market is over.

Stocks ended the day mixed Wednesday but Wall Street racked up its first winning year since 1999, as investors finally put an end to three years of selling.

The market's declines in 2000, 2001 and 2002 were signs of a nation that was rocked to its core.

The three-year downturn in stocks -- Wall Street's worst bear market in some 60 years -- followed the bursting of the late '90s tech bubble, the first recession in a decade, the Sept. 11 terrorist attacks and two wars that followed.

But after hitting a bottom in March amid tensions around the start of the Iraq war, stocks went on a tear. For the year, the Dow soared 25.3 percent, the S&P 500 climbed 26.4 percent and the Nasdaq rallied a whopping 50 percent.

And while many Wall Streeters expect more gains in 2004, some caution that the coming year isn't likely to be as strong as 2003.

"We're back to the wonderful world of optimism," Ram Kolluri, chief investment officer at GlobalValue Investors, told CNN/Money Wednesday. "You have to be cautious what you do here. The question is: 'Are we getting ahead of ourselves?'. Will we see some volatility? You bet."

Concerns over the dollar's continuing slide against the euro, as well as some mild profit-taking, put some pressure on stocks Wednesday.

The Dow industrials (up 28.88 to 10453.92, Charts) managed small gains, but the Nasdaq composite (down 6.51 to 2003.37, Charts) edged lower while the Standard & Poor's 500 (up 2.28 to 1111.92, Charts) index slid about 0.2 percent.

Jeffrey Hirsch, editor of Stock Trader's Almanac, shares his thoughts on what to watch for in the stock market in 2004. Play video (Real or Windows Media)

The blue-chip gauges ended near their highest levels in about 21 months Tuesday while the Nasdaq was near its highest level in two years after finally closing above 2,000 Monday.

Volume was light ahead of Thursday's New Year holiday, when most financial markets will be closed around the world.

Still, most investors -- at least those who were still at work -- were content to sit back and take a victory lap Wednesday.

"It's great for the market that after three down years, we've had this turnaround," said Sarat Sethi, a portfolio manager at Douglas C. Lane & Associates.

"It's important because it shows over the long term that you can make money in stocks. One of the things that you can take away from this year is that the market is always going to be volatile, but if you hang in, you can do well in the long term."

Investors were encouraged as the economy started showing signs of strength and at the same time, the Federal Reserve pledged to keep interest rates at the lowest in more than 40 years, driving money into stocks.

The three-year bear market started in 2000 after the tech bubble burst. Then there was the 2001 recession, the Sept. 11 terrorist attacks and the war in Afghanistan. Corporate scandals sank investor confidence in 2002 and then came worries about the Iraq war at the start of 2003.

Losses for three years running on Wall Street were last seen when the United States was drawn into World War II.

The last time the 30-share Dow and the S&P 500 fell for three consecutive years was between 1939 and 1941. The Nasdaq market did not exist until 1971.

While most of the market's major sectors rallied this year, not all sectors faired well.

The photo products industry got hurt, mostly due to the 28 percent drop in Eastman Kodak (EK: Research, Estimates), a Dow stock and the sector's biggest component.

(For more on this year's winners and losers, click on the links).

Tech was the best performing sector in 2003, up about 47 percent.

Within tech, Internet software and services stocks soared 175 percent. The semiconductor sector jumped 97 percent while data storage maker shares gained 84 percent.

Consumer electronics jumped nearly 150 percent, as did metals and mining, while home building stocks doubled, fueled by a huge drop in mortgage rates and the strengthening economy.

On the economic front Wednesday, the government said weekly jobless claims fell to the lowest level in nearly three years last year, a better showing than most economists had forecast.

Among individual stocks, Ciena (CEIN: Research, Estimates) added 7.5 percent and Sycamore Networks (SCMR: up $0.57 to $5.22, Research, Estimates) jumped 12.4 percent in active trading after the government awarded contracts for an optical and data network for the military.

Qwest Communications International (Q: Research, Estimates), Sprint (FON: up $0.16 to $16.42, Research, Estimates), Juniper Networks (JNPR: up $0.17 to $18.68, Research, Estimates), and Cisco Systems (CSCO: up $0.11 to $24.23, Research, Estimates) also won pieces of the contracts.

AmerisourceBergen (ABC: down $7.35 to $56.15, Research, Estimates) sank 11.6 percent after the drug distributor revised its profit forecasts due to the loss of a multi-billion-dollar government contract.

Dow component Merck (MRK: up $0.70 to $46.20, Research, Estimates) edged 1.5 percent higher after the company said late Tuesday it submitted an application to the Food and Drug Administration for approval of its new arthritis drug, Arcoxia.

Market breath was negative. Declining stocks edged out advancers by about eight to seven on the New York Stock Exchange, where 977 million shares changed hands. On the Nasdaq, 1.8 billion shares traded as losers beat out winners nine to seven.

European stocks ended the day higher, marking 2003 as their first up year since 1999. Trading in Frankfurt was closed for New Year's Wednesday.

Asian-Pacific markets that traded Wednesday ended higher; Tokyo finished for the year Tuesday up more than 24 percent gain in 2003.(Check the latest on world markets).

Treasury prices were little changed, leaving the 10-year note yield at 4.25 percent. Bond prices withstood the improving economic climate -- and the pressure on investors to move money to soaring stocks -- in 2003 as indications of inflation remained low and the Fed was on hold.

The euro hit a new high against the dollar of $1.26, but the greenback came back a bit and the euro was buying $1.2594 after the close of stock trading. The dollar edged up versus the yen, buying ¥107.26 versus ¥107.03 late Tuesday.

Light crude oil futures fell 27 cents to $32.52 a barrel. COMEX gold fell $1.10 to about $416.10 an ounce.