Stocks falter at the end of an up year

NEW YORK (CNNMoney.com) -- Stocks slumped Thursday in a thinly-traded session on the last day of 2009 as investors mulled a better-than-expected report on initial jobless claims at the end of a big year on Wall Street.

The Dow Jones industrial average (INDU) lost 120 points, or 1.1%, after ending the previous session at the highest point since Oct. 1, 2008. The S&P 500 index (SPX) fell 11 points, or 1%, after ending the previous session just short of a 15-month high. The Nasdaq composite (COMP) shed 22 points, or 1%, and ended the previous session at the highest point since Oct. 3, 2008.

Stocks had seesawed through the early afternoon as investors mulled a better-than-expected jobs report and a strong U.S. dollar, before sliding in the last hour of trade. Declines were broad-based, with 29 of 30 Dow components sliding.

Volume was anemic Thursday, with many market participants ducking out early ahead of New Year's Eve. All financial markets will be closed Friday in observance of New Year's Day.

Investors are welcoming the end of a surprisingly strong year on Wall Street. In the just-completed year, the S&P 500 gained 23.4%, the Dow industrials gained 18.8% and the Nasdaq added 44%.

Stocks are up even more substantially since bottoming in March at the height of the financial market crisis.

Since closing at a 12-year low on March 9, the Dow has gained 59% and the S&P 500 has gained 65%. Since closing at a 6-year low on the same date, the Nasdaq is up 79%.

Time Warner Cable v. Fox: The two companies are still trying to hammer out a deal for TWC to continue airing Fox-owned broadcast networks. If a deal can't be reached by midnight, all of Fox's broadcast networks and some of its cable channels will disappear from the televisions of most of Time Warner Cable's 13 million subscribers.

Jobless claims: The number of Americans filing new claims for unemployment fell to 432,000 last week, the government reported. It was the lowest level since July 2008. Economists expected 460,000 new jobless claims, up from the 454,000 filed in the previous week.

World markets: Asian markets ended higher, with Hong Kong's Hang Seng gaining 1.8%; Japan ended its trading year on Wednesday. In Europe, London's FTSE 100 gained 0.3% and France's CAC 40 was barely changed. A number of markets were closed, including the German market.

Commodities and the dollar: COMEX gold for February delivery rose $3.70 to settle at $1,096.20 an ounce. Gold closed at an all-time high of $1,218.30 an ounce earlier this month.

U.S. light crude oil for February delivery rose 8 cents to settle at $79.36 a barrel on the New York Mercantile Exchange.

The dollar gained versus other major currencies.

Bonds: Treasury prices tumbled, raising the yield on the 10-year note to 3.84% from 3.79% late Wednesday. Treasury prices and yields move in opposite directions.

Market breadth was negative and trading volume was among the lightest of the year. On the New York Stock Exchange, losers beat winners by two to one on volume of 680 million shares. On the Nasdaq, decliners topped advancers by eight to five on volume of 1.25 billion shares.