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Oil prices drop Gold prices rise sharply European and Asian markets also decline

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The seemingly unstoppable market rally of 2013 kicked off the new year Thursday with what many hope is just a temporary pause.

All three major stock market measures finished their first days of trading down nearly 1%, as investors who wanted to lock in gains from 2013’s remarkable rally took their first opportunity in a new tax year. Few investors, though, read too much into this early sign from the market so early.

Anyone in December who wanted to take a gain was better off waiting a day to push their capital gain a year out, says Jack Ablin of Harris Private Bank. It’s natural for investors who have enjoyed gains to realize them this year and push (tax) obligations out 12 months.

Explainable or not, it was not a pretty day. The Dow Jones industrial average sank 135.31 points on its first day to 16,441.35, and investors have enjoyed what’s practically been a non-stop rally in stocks in all of 2013. In fact, at no point in 2013 did the Dow, Standard & Poor’s 500 or Nasdaq close with a year-to-date loss.

The Standard & Poor’s 500 index dropped 16.38 points, or 0.9%, to close on Thursday at 1,831.98. The Nasdaq composite index slipped 33.52 points, or 0.8% to 4,143.07.

This was the first time since 2008 that stocks opened with a drop. Investors are especially touchy about how stocks do in January since many feel it can be telling about the rest of the year. The last 40 times the S&P 500 has risen during its first five days, the market ended the year higher 34 times with an average gain of 13.6%, says Stock Trader’s Almanac. Last January, the S&P rose 2.2% the first five days of what turned out to be best year for stocks in 16 years.

The market’s worst first-five day period happened in 2008 when the S&P 500 lost 5.3%. And during that year, stocks fell 38.6%.

Beyond tax tactics, the first day of trading started off on a bad note after Wells Fargo downgraded its rating on electronic gadget maker Apple. That pushed Apple shares down 1.4% and weighed on the entire tech sector.

If anything, the choppy first day of trading is a reminder to investors that it’s a new year and trading won’t necessarily be as smooth as it was last year, says Ken Winans of Winans Investments. It might be more of a trading market this year, he says. The year might be very choppy.

Gold prices for February delivery surged more than $20 to $1,224 an ounce. In 2013, gold suffered its worst year since 1981.

Benchmark oil fell $2.85 to $95.58 on the New York Mercantile Exchange.

In economic news, the number of Americans seeking unemployment benefits last week fell by 2,000, extending a recovery in the job market. U.S. manufacturing grew at a healthy pace in December as factories stepped up hiring and received more orders, according to a private survey.

Losses in the U.S. tracked the pounding that stocks suffered in Europe. France’s CAC-40 fell 1.6% to 4,227.28 and Germany’s DAX dropped 1.6% to 9,400.04. Britain’s FTSE lost 0.5% to close at 6,717.91.

Markets across Asia retreated following some disappointing manufacturing data out of China.

The Shanghai composite fell 0.3% to 2,109.39 and Hong Kong’s Hang Seng index lost 0.1% to 23, 277.37.

Tokyo’s Nikkei 225 index was closed for the New Year’s holiday.

Contributing: USA TODAY’s Kim Hjelmgaard; The Associated Press