STOCKS TUMBLE: Here's What You Need To Know

U.S. markets ended 2013 at a record high. And today, they started 2014 in the red.

First, the scoreboard:

• Dow: 16,455.5 (-121.0, -0.7%)
  
• S&P 500: 1,832.5 (-15.7, -0.8%)
• Nasdaq: 4,140.8 (-35.7, -0.8%)

And now the top stories:

• So, stocks sold off today. But even famously bullish strategists, like Nuveen's Bob Doll, have predicted that stocks could fall sharply before ending the year higher.
• The ISM manufacturing survey index fell to 57.0 during the month from 57.3 in November. The employment sub-index climbed to 56.9, the highest reading since June 2011. The new orders sub-index jumped to 64.2, the highest reading since April 2010. "The strength in ISM new orders is particularly encouraging, because it is a forward-looking component of the index, and it suggests that the headline will be able to sustain readings near recent levels in the near term," said Deustche Bank's Carl Riccadonna. "The resilience of the manufacturing ISM provides important corroboration that the economy is not slowing sharply in response to the large Q3 inventory build."
• Weekly unemployment insurance claims fell to 339,000 from 341,000 a week ago. While the number was welcome, economists continue to warn against taking the recent numbers seriously due some recent technical distortions. "While the Labor Department noted nothing unusual in last week's claims figures, volatile seasonal factors continue to obscure the underlying trend in the claims figures, which we believe remains in the 315K-335K range," said TD Securities' Gennadiy Goldberg. "The 4 week moving average of initial claims saw a notable move away from this range, jumping to 357K from 349K last week as the average now captures the seasonal volatility seen in the series over the past several weeks. We therefore believe that claims remain largely worth discounting until seasonal volatility begins to abate later this month.
• Construction spending increased by 1% month-over-month in November, which was stronger than the 0.6% increase expected by economists. Previous months' numbers were also revised up sharply. However, Pantheon Macroeconomics' Ian Shepherdson warns against taking the latest numbers too seriously because revisions have indeed been large. "[T]hese data are published far too early and are therefore deeply unreliable," said Shepherdson.
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