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Stock investors in striking distance of reaping best annual returns in decades

Apple and Amazon are among the consumer technology stocks that helped push the Nasdaq composite above 9,000 points this week for the first time — and their advances may also propel the S&P 500-stock index next week to its largest annual gain in more than two decades.

So far in 2019, the S&P has returned 29%, roughly on par with its 29.6% gain in 2013. Some stock market observers say that, come the end of 2019 next Tuesday, the S&P 500 could deliver its biggest annual gain since 1997, when the index rose just over 31% in a single year. 

On Friday, both the S&P 500 and the Dow were essentially flat, while the Nasdaq declined 0.17%.

The year-end market gains have been bolstered by tech stocks such as Amazon, whose shares jumped 4.5% on Thursday after the retailer said consumers had ordered billions of items during the holiday season. Even so, Amazon's shares have returned about 24% year-to-date, lagging the broader market. 

Amazon's gain this week is "good news for buy-and-hold Amazon investors who have seen the stock underperform the major indices in 2019 amid regulatory concerns and the company's focus on expanding its delivery and logistics services," wrote Alex Coffey, a senior trading specialist at TD Ameritrade. "Amazon has seen margin pressure from its focus on fast shipping options, including one-day delivery."

The 2020s in tech: 5G, flying cars 03:55

Apple stock

After a three-session stretch of gains, Apple shares slipped 0.04% on Friday. So far this year, shares of the world's biggest publicly traded company have gained 84%, placing it on track for its largest increase since its stock more than doubled in 2009.  

But not all tech giants are outperforming. Like Amazon, Netflix is also lagging the broader market. Its shares have increased 23% this year, below the S&P's returns, as it battles competition from a number of fronts.

"After returning more than 4,000% over the last 10 years, the streaming giant is now facing increased competition from other streaming services," stated TD Ameritrade's Coffey, citing Disney+ as among the recent alternatives.

Federal Reserve

Wall Street has benefited from a steady lifeline from the Federal Reserve, which has cut interest rates three times this year and extended its balance sheet by 31% during the past three months, noted Michael Arone, chief investment strategist at SPDR Business. 

U.S. and China's "phase one" trade deal 07:07

A truce in the trade war between China and the U.S., as well as a growing economy, are also lifting investor optimism.

"The U.S. government and the Fed have provided more presents to investors during this long-running bull market than Old Saint Nick himself," Arone noted. "Where is all this good holiday cheer flowing? Into financial assets of course. It's no coincidence that markets are at all-time highs."

Investors may be more focused on corporate earnings growth in 2020, John Lynch, chief investment strategist for LPL Financial, wrote in a Monday research note. If the truce between China and the U.S. holds, U.S. businesses could boost revenue and profit growth next year, he added. 

"In 2020, we expect earnings to do the heavy lifting," Lynch wrote. "Better clarity on trade may help drive increased business spending and more productivity, which we think will lead to stronger earnings growth in 2020."

--With reporting by The Associated Press.

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