MACROECONOMIC CONCERNS, ECONOMIC RECOVERY PROBLEMS

The financial markets in 2011 can be summarized in three words: downside macroeconomic concerns. Bill Stone, chief investment strategist with PNC Asset Management Group, said worries about big worldwide events, primarily the Eurozone crisis, dominated investors' minds this year.

The shaky U.S. economic situation set the tone at the start of 2011, with anemic GDP growth in the first half of the year.

The closing days of 2011 are a reminder of the sputtering U.S. economic recovery. It was also a year of market volatility, though it ended with stocks about even or up slightly.

On Friday, the last day of trading in 2011, the Dow Jones industrial average closed up 5.53 percent for the year at 12,217.56. The Nasdaq closed down 1.8 percent for the year at 2,605.15. The S&P 500 was unchanged in terms of price performance for the year at 1257.60. But if an investor had reinvested dividends the total return for 2011 would have been 2.11 percent, said Stone.

The "Santa Claus rally" usually brings a gain in stocks in the last five trading days of the year through the first two trading days of the new year. This year, the rally was muted in the last five days.

So far the S&P 500 is up a little less than 0.3 percent.

"While Santa still has two trading days left, he better hurry since this return is significantly lagging the 1.6 percent average return since 1969 for these seven trading days," Stone said.

The economic recovery has had robust aggregate demand, largely from consumers, but was full of fading positive sentiment, LeBas said.