Stocks opened the day sharply higher with the Dow gaining as many as 283 points at one point before a huge intraday reversal saw the market fall into negative territory and stocks finish in the red for the second day in a row.
- Dow: 17,613.8, -27, (-0.1%)
- S&P 500: 2,023.00, -5.2, (-0.3%)
- Nasdaq: 4,661.5, -3.2, (-0.1%)
And now, the top stories on Tuesday:
1. It was a big day for the labour market. This morning we got data from the National Federation of Independent Business that points to rising wages for American workers. Additionally, the Job Openings and Labour Turnover Survey, or JOLTS report, from the BLS showed that job openings surged to another post-crisis high in November. And following these reports, economists could barely contain their excitement.
2. Following the one-two punch of data suggesting an increase in wages and more job openings, Chris Rupkey at Bank of Tokyo-Mitsubishi said, “The labour market isn’t just healing — it is red hot with nearly 5 million jobs available. Slack in the economy isn’t just going away; it’s all but evaporated.” Ian Shepherdson at Pantheon Macro said that since the financial crisis, the economy has really needed the small-business sector to normalize, and now it finally is. The next big economic report on the state of the labour market is the January 30 employment cost index.
3. In stock news, GoPro was a big loser on Tuesday after a report from Patently Apple said that Apple was granted a patent for a GoPro-like camera system. Patently Apple’s report said, “In one implementation, Apple’s invention could directly move into GoPro’s territory as the patent specifically mentions the weaknesses of the GoPro devices.” The stock has still more than doubled from its IPO price, but is down big over the last couple months.
4. Mortgage servicer Ocwen Financial was also a big loser on Tuesday, falling more than 35% after a report from the Los Angeles Times said that California is seeking to suspend the company’s mortgage licence in the state, which the company counts as its largest source of business.
5. A report in Fortune said that Warren Buffett proteges Todd Combs and Ted Weschler, who manage Berkshire Hathway’s stock portfolios, failed to beat the market this year.
6. Last night, Alcoa kicked off earnings season by reporting bottom- and top-line results that topped expectations, and the major US banks are set to take center stage later this week. Here’s the lineup, from the NYSE’s Charlie Brown: “JP Morgan Chase reports ahead of the open on Wednesday, and Wells Fargo after the close. Then comes Bank of America and Citigroup on Thursday, followed by Goldman Sachs and SunTrust Banks on Friday.”
7. Oil prices had another wild ride on Tuesday, with West Texas Intermediate crude falling below $US45 a barrel overnight, a new low for the commodity which has been in free fall over the last several months, but in late trade on Tuesday, WTI made a huge comeback and was flirting with $US47 a barrel near Tuesday’s market close.
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