"There's been a lot thrown at this market, and it's proven to be very resilient," said Gary Flam, a portfolio manager at Bel Air Investment Advisors.
Stocks started the year on a tear, with optimism about an improving job market and a broader recovery providing the backdrop to the S&P 500's best first-quarter rally in 14 years. The index advanced 12 percent by the end of March, closing the quarter at 1,408, its highest in almost four years, with financial companies and technology firms like Apple leading the charge. The Dow ended the first quarter at 13,212, on an 8 percent gain.
Investors' optimism faded, though, as Europe's intensifying debt crisis and concerns about its impact on global economic growth prompted a sell-off. By the start of June, stocks had given up the year's gains.
The outlook for growth in China, the world's second-largest economy, also began to weigh on investors' minds. Economic growth there slowed to 8.1 percent in the first quarter as export demand waned. Investors worried it would keep falling. The Dow fell to 12,101 June 4; the S&P fell to 1,278 June 1.
The stock market recovered its poise only after the European Union put together loans to bail out Spain's banks June 10 and European Central Bank chief Mario Draghi pledged to do "whatever it takes" to save the euro.
By the time Fed chairman Ben Bernanke announced Sept. 13 that the U.S. central bank would start a third round of bond purchases intended to push longer-term interest rates lower and encourage borrowing and investment, the S&P 500 had surged 14 percent from its June 1 low. A day later, the index peaked at a five-year high of 1,466. The Dow peaked at 13,610 on Oct. 5.
Analysts had been cutting their outlook for growth in the fourth quarter. At the second quarter's start, estimated earnings growth for the period was 15.7 percent. That had fallen to 3.4 percent by Dec. 27.
The year's final twist came in Washington. Stocks wavered ahead of a presidential election that seemed too close to call, then fell as much as 5 percent in the 10 days after President Obama's victory. Though the S&P 500 managed to recoup those losses by December, some investors are still urging caution.
Any budget agreement will still be "ill-tasting medicine," almost certainly involving both spending cuts and tax increases, said Joe Costigan, director of equity research at Bryn Mawr Trust Co. "The question is, how much will the drag from the government be offset by business and personal spending," he said. "The market has reasonable expectations for growth priced in, so I don't think we're going to see a big run-up."