* Wall Street ends day lower, but posts best year since 2003 * Dollar index up 4 pct in December; off 4.1 pct in 2009 * Oil, above $79 barrel, has biggest annual gain since 1999 * 10-yr notes set for worst annual performance since 1999 (Updates with close of U.S. markets)
By Herbert Lash
NEW YORK, Dec 31 (Reuters) - The dollar gained on Thursday but world stocks edged lower as a number of equity markets posted their best annual performance in years in anticipation of recovery from the worst recession since the 1930s.
Many commodities, stocks and even bonds posted double-digit gains in 2009 while some assets, such as copper futures and emerging market equities, doubled in price as investment returned to markets drained by the deep downturn in 2008.
Equity markets worldwide glowed. Asia stocks racked up a 68 percent gain for the year, regional European shares climbed 25 percent -- their best annual performance since 1999 -- and Wall Street closed out its best year since 2003.
The Standard & Poor's 500 index rose 23.5 percent for the year, the Dow added 18.8 percent for 2009 and the Nasdaq climbed 43.9 percent from its close on Dec. 31, 2008.
Signs of economic strength, including a record percentage of companies beating profit expectations, pushed the broad market up more than 60 percent from the depths of the biggest bear market since the Great Depression on March 9.
"It shows how much of a recovery there's been," said Charles Lieberman, chief investment officer of Advisors Capital Management, LLC in Paramus, New Jersey. "It really was a turnaround year."
For a FACTBOX on global market losses and gains for 2009, click here [ID:nLDE5BT0P8]
MSCI's all country world index <.MIWD00000PUS> slipped almost 0.2 percent but gained about 31.5 percent for the year.
Oil rose 78 percent in its biggest annual climb in a decade and gold sealed its largest annual gain in three decades, rising for an unprecedented ninth year in a row. Gold climbed 23 percent for the year and silver jumped almost 49 percent.
Copper futures notched a 139 percent year-on-year rise, as fund buying and a looming mine strike in Chile buoyed prices on the final trading day of 2009. For details: [ID:nLDE5BU09B]
MSCI's Latin American stock index <.MILA00000PUS> ending the year about 98 percent higher.
Volumes were thin on the last day of 2009 with little economic data to trade on. The dollar rose to its highest level in more than three months against the yen after a report showed U.S. jobless claims fell to their lowest since mid-2008, affirming optimism about the economy. [ID:nN31536622]
A growing sense that recovery is taking hold helped oil finish the year above $79 a barrel, as it posted a seventh straight session of gains. Crude prices have risen 14 percent in just over two weeks.
U.S. stocks slipped after a reading on Midwest business activity was revised downward and investors sold some of the year's winners to lock in 2009's strong gains. [ID:nN31187861]
The Dow, S&P 500 and Nasdaq closed down about 1 percent, dropping the most just before the close.
The Dow Jones industrial average <.DJI> closed down 120.46 points, or 1.14 percent, at 10,428.05. The Standard & Poor's 500 Index <.SPX> fell 11.32 points, or 1.00 percent, at 1,115.10. The Nasdaq Composite Index <.IXIC> slid 22.13 points, or 0.97 percent, at 2,269.15.
The dollar benefited from year-end buying after being sold off for most of 2009, as fund managers squared up their portfolios at the end of the year.
The greenback also erased losses against the euro. The euro
The ICE Futures' dollar index <.DXY> was down 4.1 percent this year, but for December it was up about 4 percent, its best monthly performance since January.
The dollar was up against a basket of major currencies, with the dollar index up 0.04 percent at 77.944.
U.S. crude for February delivery
U.S. February gold futures
Spot gold
U.S. Treasuries prices eased in thin pre-holiday trade after lower-than-expected weekly jobless claims bolstered expectations of an economic recovery and undermined bonds' safe-haven appeal. [ID:nN31508841]
Benchmark 10-year notes
For a graphic comparing the 2009 performance of major stock markets, click on: http://graphics.thomsonreuters.com/129/GLB_MKTS1209.gif (Reporting by Caroline Valetkevitch, Gertrude Chavez-Dreyfuss, Edward McAllister, Chris Reese and Frank Tang in New York; Joanne Frearson in London; writing by Herbert Lash; Editing by Diane Craft)