STOCKS FALL AGAIN: What You Need To Know About The US Market Overnight

Stocks climbed back after a rout but ended up in the red.

First, the scoreboard:

  • Dow: 15,837.88 (-41.43, -0.26%)
  • S&P 500: 1,781.56 (-8.73, -0.49%)
  • Nasdaq: 4,083.61 (-44.56, -1.08%)

And now the top stories:

  • Federal authorities arrested Charlie Shrem, the CEO of BitInstant, at JFK airport and charged him with money laundering. Authorities allege Shrem sold bitcoin to Silk Road users who would then buy drugs (they also argue Shrem himself bought drugs). Bitcoin enthusiasts Cameron and Tyler Winklevoss were major backers of BitInstant. “Although BitInstant is not named in today’s indictment of Charlie Shrem, we are obviously deeply concerned about his arrest,” the twins emailed in a statement to BI. “We were passive investors in BitInstant and will do everything we can to help law enforcement officials.” Incidentally, the pair will speak tomorrow at New York State financial services hearings regarding digital currencies.
  • The Dallas Fed’s manufacturing activity survey edged up to 3.8 from a revised 3.7, beating expectations for a 3.5 print. “Perceptions of broader business conditions continued to be optimistic in January. The general business activity index posted its eighth consecutive positive reading and was nearly unchanged at a reading of 3.8. Similarly, the company outlook index posted its eighth positive reading in a row and held steady at 15.9,” according to the report.
  • New home sales dropped 7.1% month-over-month for December, much worse than analyst expectations for a 1.9% fall. Capital Economics’ Paul Diggle says that may have been a result of this winter’s bad weather. “Sales activity in January is likely to be weak for similar reasons. But we continue to think that new home sales will stage an encouraging rise over 2014 as a whole,” he wrote.
  • Herbalife shares went on a tear (after dropping 12% last week) on reports that Herbalife bull and D.A. Davidson analyst, Tim Ramey, was leaving his firm to work for Bill Stiritz, the largest individual shareholder of the stock. Stiritz reportedly wants Herbalife to undergo a leveraged buyout.
  • U.S. Flash PMI hit 56.6 in January, up from 55.7 in December and the highest print since September 2013. “U.S. service providers reported a busy January, providing an important signal that that the economy remains in good health at the start of the year,” wrote Markit’s Chris Williamson. “Growth of business activity picked up from the already-robust pace seen in December, and optimism about prospects for the year ahead rose to one of the highest levels we’ve seen since the financial crisis.”
  • Keep an eye on the U.S. this week, with three big events coming up: The State of the Union address, the House GOP strategy retreat, and Bernanke’s retirement after the FOMC policy statement. These events “have the potential to determine the course of the remainder of the year in D.C. macro policy,” Guggenheim’s Chris Krueger wrote to clients.
  • The emerging market sell-off has been the major story in recent days. Our Matthew Boesler explains: “Much of the inflows into EM assets in recent years were predicated on a search for yield in the absence of any in developed markets. But as U.S. interest rates have risen in recent months, there has been less and less of a justification to be invested in EM, and those flows have begun to reverse.” We also rounded up the “fragile five” — troubled EM currencies finding pressure against the dollar.
  • Apple will report earnings right after the bell, with investors looking for $14.35 EPS and revenue of $58 billion. We’ll be covering it live on Business Insider here.

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