New York ? Investors marked the last trading day of 2005 Friday with the same conundrum they faced all year – trying to find a good reason to buy stocks and coming up short. Stocks fell to their December lows, and the Dow Jones industrials finished the year with a loss.

With little news to spur buying, stocks fell as investors consolidated their meager profits on the year. As a result, the Dow suffered its first down year since 2002, although the other major indexes posted modest gains for 2005.

This year was marked by skyrocketing energy prices, a slowing economy, hot-and-cold inflation threats and the Federal Reserve steadily raising interest rates – all of which made investors nervous about the state of the economy and kept stocks volatile but ultimately little changed since the end of 2004.

Looking ahead, investors hope the Fed will stop raising rates as early as possible in 2006 to avoid slowing the economy unnecessarily, and nervousness on this point has kept stocks in check through December.

“It’s really the Fed at this point that’s kept the market in check,” said Hans Olsen, managing director and chief investment officer at Bingham Legg Advisers. “The historic conversation between the Fed and the markets has become a bit of an argument over whether there’s really inflation, and whether we need those rate hikes.”

For the year, the Dow fell 0.61 percent, while the S&P rose 3 percent and the Nasdaq gained 1.37 percent.

Clerks and traders in the eurodolloar pit at the Chicago Mercantile Exchange celebrate the close of trading for the year. Wall Street marked the last trading day of 2005 Friday by pushing stocks lower as investors gave up on the dwindling fourth-quarter rally and consolidated what profits they made this year.

Much of those gains came in the fourth quarter, when November’s rally, prompted by lower energy costs and the appearance of an end in sight to the Fed’s interest rate hikes, caused eager investors to jump back into stocks. For the quarter, the Dow rose 1.41 percent, the S&P climbed 1.59 percent and the Nasdaq gained 2.5 percent.

Yet December was a difficult month for stocks and the much-anticipated “Santa Claus” rally never really materialized as concerns once again arose over the Fed’s policies and energy prices marched back above $60 per barrel. For the month, the Dow lost 0.82 percent, the S&P shed 0.1 percent and the Nasdaq fell 1.23 percent.