New York ? Wall Street slipped lower Friday, closing out a year that will be remembered for the stock market’s great comeback – a year-end rally that pushed the Dow Jones industrials past 12,000 for the first time.

By all accounts, 2006 ended up a very good year for stocks as bullish investors bounced back from a slumping housing market and the Federal Reserve’s two-year campaign of interest rate hikes. The markets approached record levels in the spring, pulled back sharply in the summer, but found a clear direction in the fall to send the major indexes to multi-year highs.

Blue chips were the standouts of 2006. The Dow Jones industrial average, the index of 30 of the nation’s biggest companies, hit record levels dozens of times since achieving its first close above 12,000 on Oct. 19; it traded as high as 12,529.87 before dipping to its close for the year.

This was the best year for the stock market since 2003.

The rally was fed by investors’ growing belief that the economy has withstood well the Fed’s rate hikes and the effects of record high oil prices. And some analysts expect the advance to continue.

Specialist Paul J. Girola checks monitors at his post at the trading floor of the New York Stock Exchange, soon after the opening bell rings for the last trading day of 2006. He won't be back at work until Wednesday, as markets will be closed Monday for New Year's Day and Tuesday to mark the funeral of President Gerald R. Ford.

“The stock market is correct in its judgment that we are probably only in the fifth or sixth inning of the game, and that this (economic) expansion may even go into extra innings,” said Stuart Schweitzer, global markets strategist for JPMorgan Asset & Wealth Management. “This was a barn-burner of a year, and I expect reasonably solid results over the course of 2007.”

It wasn’t just the stock markets that made significant gains in 2006.

The bond market moved in lockstep with stocks – a rare event on Wall Street. Investors bought into the equities markets because of a strong economy and robust corporate confidence.

Meanwhile, typically more conservative bond investors used the fixed-income market as a hedge for a possible recession and interest rate cuts.