Accounting scandals, earnings misses, the weak U.S. economy and the prospect of another Gulf war made for a dismal year for equity markets in 2002.

The S&P/TSX composite index ended the year at 6,614.54, down 14%.

The Dow Jones industrial average tumbled 17% on the year to close at 8,341.63. The tech heavy Nasdaq composite index had another wretched year, falling 30% to 1,335.51.

The Nasdaq had its worst December ever, with a 9.7% drop on the month, while the Dow and S&P 500 had their poorest December since 1931, with declines of 6.2% and 6%.

The absence of a Santa Claus rally showed that investors aren’t willing to make major bets on a turnaround in the new year.

The hot sector in 2002 was gold. Gold started the year at US$278 US and climbed steadily upwards to close the year at US$347. Gold stocks soared. The TSX gold index climbed better than 42%.

Amid continuing uncertainty about Iraq, North Korea, the price of oil and the economic prospects for the United States and Japan, the outlook for equity markets in 2003 remains murky.