By ANDREW MARKS
NEW YORK CORRESPONDENT

ONLY 517 million shares changed hands on the floor of the New York Stock Exchange last Friday, barely one-third of normal volume in a tumultuous 2008. And after yet another week that ended like so many others this year - squarely in the loss column - investors will probably be more than happy to see a repeat performance when the opening bell signals the start of business on Monday, for the final three days of trading in one of the worst years on record for the US stock market.

'The quieter the better for the next few days as far as I'm concerned, and as far as just about everyone on Wall Street is concerned,' said Hugh Johnson, chief investment strategist at Johnson Illington Advisors, noting that trading volume on the holiday-shortened Dec 24 session was 400 million, also way below the 1.5 billion shares per day average this year.

'We've had enough heavy action for a lifetime in these past four months. Now the market needs a few days to lick its wounds, rest up and get ready for the new year, because I think it's going to be a pretty wild ride in the first six weeks of January,' he said.

The coming week should offer the blessing of slow news days and many investors away on vacation, although as Wall Street has come to know all too well of late, there's no guarantee of an event-free week these days. Even last week featured the news that GMAC, the 49 per cent held financing arm of General Motors, had its application to become a banking holding company approved by the Federal Reserve but subjected to a complicated debt- for-equity exchange.

But once the first session of 2009 takes place on Friday, the question on every investor's mind will be whether Mr Johnson's anticipated wild ride for the market will feature a 'January effect' rally to give the stock market a quick boost of optimism as the new year gets underway.

'I remember how the first day of this year started with a sell-off,' Mr Johnson recalled. 'I'd like to see us begin with an advance just as a better sign for 2009,' he said.

The horrible underperformance of 2008 offers better chances of a solid pop from the January effect: stocks gain nearly 4 per cent more on average in Januarys that follow an off-year. Traders warned, however, that like the hoped-for Santa Claus rally that never happened, the January effect boost could prove a disappointment, too.

'We might get another wave of forced selling from hedge funds due to end-of-year redemptions, and that could hurt us in the first week or two,' said Bill Nardis, director of equity trading at Neptune Capital Management.

On Friday, stocks closed out the holiday-shortened week on a high note, as the Dow Jones Industrial Average added 47.07 points, or 0.6 per cent, to 8,515.55, with GM leading the way on the news of the Fed's conditional granting of bank holding company status to GMAC. The S&P 500 gained 7.38 points, or 0.9 per cent, to 872.80. The Nasdaq moved up, too, gaining 5.34 points, or 0.4 per cent, to 1,530.24.

For the week, however, each of the major indices ended lower. The Dow shed 0.7 per cent, the S&P lost 1.7 per cent, and the Nasdaq sank 2.2 per cent. There is little in the way of market-moving data on the economic front this week.

'Any selling will likely be a result of final year-end tax moves and portfolio rebalancing as investors jettison their worst-performers,' said Mr Nardis.

Consumer confidence for December is due on Tuesday, as are Chicago purchasing managers data and the S&P/Case Shiller home price index.

Wednesday, the last trading day of the year, features weekly jobless-claims data, an update on mortgage applications and crude-oil inventories.

On Friday, as investors get back to business following the New Year's Day holiday, Wall Street will get the latest gloomy reading on the economy when the ISM's manufacturing report for December is due to be reported.

This article was first published in The Business Times on December 29, 2008.