There were plenty of big moves on the stock market in 2013, and the causes of many of them could be traced back to Washington.
Investors dumped stocks when political gridlock brought the country perilously close to defaulting on its debt. They also fretted when Congress shut down the government rather than pass a budget. Likewise, markets shot higher when the dysfunction appeared to pass.
The Federal Reserve was also top of mind for Wall Street in 2013. The U.S. central bank's aggressive bond-buying program has pumped money into financial markets and kept long-term interest rates extremely low.
Trying to guess when the Fed would start winding down its $85 billion a month in bond purchases became the biggest parlor game of the year on Wall Street. In mid-December, the Fed finally gave its answer: Citing an improving economy, Fed officials said they would start to reduce the purchases in early 2014.
Here are some of the biggest gains and drops of the year in the Dow Jones industrial average, and what caused them.
The Biggest Gains:
— Oct. 10: Up 323 points. Markets soar after Republican leaders and President Barack Obama seem willing to end a 10-day standoff over fiscal issues that threaten to leave the U.S. unable to pay its bills.
— Jan. 2: Up 308 points. Stocks start the year off with a bang. Investors are relieved after lawmakers hammer out a last-minute budget deal to avert the "fiscal cliff" of sharp tax hikes and across-the-board spending cuts.
— Dec. 18: Up 293 points. When the Fed finally announces its decision to begin reducing, or "tapering," its bond purchases, investors rejoice, seeing it as a vote of confidence in the U.S. economy.
— June 7: Up 207 points. Investors are encouraged that hiring picked up in May, but not so fast that it might prompt the Fed to move quickly to reduce its economic stimulus. Analysts call the 175,000 job additions a "Goldilocks" number.
— Oct. 16: Up 205 points. A last-minute agreement to keep the U.S. from defaulting on its debt and reopen the government after a 16-day shutdown sends stocks soaring. The deal is reached just hours before a deadline to raise the nation's debt limit.
The Biggest Drops:
— June 20: Down 353 points. The Dow has its worst day of 2013 after the Federal Reserve says it might pare back its economic stimulus program later in the year.
— April 15: Down 265 points. A plunge in commodity prices spills over into the stock market. The price of crude oil sinks to a four-month low, pulling energy stocks lower. Mining companies drop after the price of gold has its biggest one-day fall since 1983.
— Aug. 15: Down 225 points. Investors dump stocks following dour sales forecasts from Wal-Mart and Cisco and on concern that the Fed will soon start withdrawing its support for the economy.
— June 5: Down 217 points. Investors worry about a series of troubling economic reports, including weak hiring at private companies, sluggish factory orders and limited growth in the service sector.
— Feb. 25: Down 216 points. Fears of another flare-up in Europe's debt crisis hit U.S. markets. Results from an election in Italy appear to push the country toward political gridlock, undermining efforts to shore up Italy's finances.
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