By Michael Bowman
Washington
31 December 2008

After a year of gut-wrenching losses, stock markets around the world recorded a positive day amid light trading to close out 2008. 

A trader talks on the phone at the Shanghai stock market on New Year's Eve in Shanghai, China, 31 Dec 2008

Modest gains on the last day of 2008 cannot erase the massive losses of the last 12 months. Wall Street's Dow Jones Industrial Average shed 35 percent of its value, while Germany and Japan's stock markets finished the year down roughly 40 percent. Many emerging markets from Latin America to Asia fared even worse, making 2008 the most painful year in decades for investors and countless publicly traded companies across the globe.

The year decimated America's corporate financial landscape, with many of the nation's best-known investment firms, banks, mortgage insurers and insurance companies bankrupt, sold, taken over by the federal government, or continuing to exist thanks to the biggest taxpayer bailout in U.S. history.

"Merrill Lynch, Bear Stearns, Lehman [Brothers], major companies that were the cornerstone of our financial services business are no longer with us. That is just a big shock," said Hugh Johnson, who heads the New York-based financial firm Johnson Illington Advisors.

Job seekers check employment offers in Miami

Over the last 12 months, U.S. unemployment has jumped by more than a percentage point as the nation weathered a deepening recession that has spread around the world. Many economists are predicting even higher rates of unemployment in 2009.

Wednesday, the U.S. Labor Department provided a glimmer of unexpected good news. New claims for unemployment benefits fell by more than 90,000 at the end of last week compared to the previous week. Overall, however, the number of Americans receiving unemployment benefits remains at the highest level seen since 1982.

Having been battered by a year of sour economic news, U.S. markets were little-impressed by the latest unemployment figure, according to Art Cashin of UBS Financial Services.

"To see a number down 92,000, particularly given the economic environment that we have, made the number look a bit suspicious [to investors]," said Cashin.

Oil prices traded just below $40 a barrel Wednesday, capping a wild year for energy prices that saw oil spike to a record-high of nearly $150 a barrel in July. Oil prices have been on an almost-uninterrupted slide downward ever since, pushed lower by a global recession that has weakened demand for fuel.