JAIL STOCKS CRASH: Here's what you need to know

The three main stock indexes traded little changed during much of the session on Thursday as crude oil rallied out of a bear market.

First, the scoreboard:

  • Dow: 18,596.50, +22.56, (0.12%)
  • S&P 500: 2,186.90, +4.68, (0.21%)
  • Nasdaq: 5,240.15, +11.49, (0.22%)
  • WTI crude oil: $48.17, +1.38, (+2.95%)
  1. Prison stocks crashed. The Department of Justice is phasing out contracting to privately run prisons, according to a memo. After this news crossed, shares of Corrections Corporation of America, the largest publicly traded prison provider, fell in half, while Geo Group fell by more than 40%. Trading in both shares was halted for volatility. Private prisons are less secure than those run by the Federal Bureau of Prisons, the DOJ said.
  2. Walmart beat and raised. The world’s No. 1 brick-and-mortar retailer reported second-quarter adjusted earnings per share of $1.07 ($10.2 estimated), revenue of $120.9 billion ($120.3 billion estimated), and raised its outlook for full-year EPS. Sales at stores open for at least one year were positive for a seventh straight quarter.
  3. T. Rowe Price is suing Valeant Pharmaceuticals, alleging fraud. The mutual fund, which invests in the company, alleges that Valeant is running a “fraudulent scheme” through its now shuttered pharmacy, Philidor. Valeant said it has not yet been served the suit.
  4. Crude oil is back in a bull market. West Texas Intermediate crude futures in New York closed up 22% from the recent bottom on August 2, when they slipped below $40 per barrel. Oil has gained in every session since August 11 as reports of talks towards a production-freeze agreement among OPEC producers were revived.
  5. In economic data, initial jobless claims fell more than expected last week, by 4,000 to 262,000. Claims have now been below 300,000 for 76 straight weeks — the longest stretch since 1970. And, the Philly Fed manufacturing index rose in August to 2 from -2.9 in July. But indicators of employment and new orders showed continued weakness in the region.


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NOW WATCH: The Justice Department is ending its use of private prisons and the country’s largest one is tanking on the stock market

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