Stocks struggled to find direction today. The Dow tumbled early, before being in the green by 50 points. Then it tanked, falling 119 points into the red. And then finally, markets closed near break-even.
First, the scoreboard:
- Dow: 15,889.7 (-24.8, -0.1%)
- S&P 500: 1,792.8 (-2.3, -0.1%)
- Nasdaq: 4,038.0 (+0.8, +0.0%)
And now the top stories :
- The day kicked off with a whopper of a jobs report from ADP. According to the data firm, U.S. companies added 215,00o private payrolls in November, which was much stronger than the 170,000 expected by economists. Furthermore, the October number was revised up to 184,000 from an earlier reading of 130,000. "The job market remained surprisingly resilient to the government shutdown and brinkmanship over the treasury debt limit," said Moody's Mark Zandi. "Employers across all industries and company sizes looked through the political battle in Washington. If anything, job growth appears to be picking up."
- The ADP report was followed by the U.S. trade balance report that showed that the trade deficit shrunk to $40.6 billion in October from $43 billion in September. "US exports are setting all-time records, even sales to Europe are improving," said Chris Rupkey, the top U.S. economist at Bank of Tokyo-Mitsubishi. "It looks like the economy is shaking off the uncertainty from Washington, and in 2014 the economy is finally going to have the wind at its back, making the dreams of 3% real GDP finally become a reality."
- New home sales surged 25.4% month-over-month to an annualized pace of 444,000 in October, which was stronger than the 429,000 expected by economists. "US new home sales suggest housing remains resilient to higher mortgage rates," said Barclays' Michael Gapen.
- The only number that disappointed today was the ISM services index, which fell to 53.9 in November from 55.4 in October. This was worse than the 55.0 expected by economists. The employment sub-index fell to 52.5 from 56.5, suggesting a similar slowdown in the pace of hiring in services industries.
- "Is this the beginning of a significant correction?" asked market veteran Ed Yardeni. "I doubt it since corrections and bear markets are triggered by mounting concerns about a recession. The latest data are pointing more to a boom than a bust."
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