NEW YORK, Dec. 29 (UPI) -- U.S. stock indexes fell in the year's final day of trading Friday, but the Dow Jones industrial average still finished its best year since 2003.

The Dow dropped 38.37 points to 12,463.15, but gained 16 percent over the year, its greatest yearly gain in three years.

On the New York Stock Exchange, 1,274 stocks advanced and 2,059 declined on a volume of 1.7 million shares.

The Standard & Poor's 500-stock index, up 14 percent in 2006, slipped 6.45 to 1418.28. The Nasdaq Composite Index, up 9.5 percent this year, slid 10.28 to 2415.29.

Regular trading resumes Wednesday. Most U.S. exchanges will be closed Monday for New Year's Day and Tuesday to observe the death of former U.S. President Gerald Ford.